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Strategies & Market Trends : Value Investing
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Recommended by:
Harshu Vyas
To: Paul Senior who wrote (75391)4/7/2024 11:54:09 AM
From: E_K_S1 Recommendation  Read Replies (1) of 78740
 
Re: CNXC may not be as good a Genpact Ltd (G) for the AI play.

Have you looked at Genpact Ltd (G) and wonder how their metrics align w/ your value proposition? I started a position in G w/ buys in 12/2023 & 3/2024 as I am accumulating shares. Still under on these Buys w/ an avg cost of $34/share.

My thesis was that G would be a good AI candidate, profitable, 11.8x Forward PE , little debt and FCF positive every year for the last 10 years. Their DCF calculation has them valued at $60/share 48% higher than the current price.

My perplexity AI bot came up w/ this analysis:

Genpact's value proposition is that they combine business process orchestration with enterprise data management and AI-led innovation to transform customer experiences 1. Some key points about Genpact's growth potential from AI:
  • Genpact has invested in developing 3 generative AI patents and has trained 400 generative AI experts, with plans to double that by the end of the year 2. This shows their commitment to scaling their generative AI capabilities.
  • Genpact has committed $600 million to investments in AI over the next 3 years, indicating they see significant growth opportunities in this area 2.
  • Genpact is applying generative AI beyond just productivity gains, targeting improvements in time-to-decision and time-to-value for customers 2. This suggests they are looking to drive more strategic business impact with AI.
  • Genpact is working with partners like AWS to deploy generative AI solutions, such as for financial crime detection and contact center customer experience enhancement 2. Leveraging partnerships can help scale their AI offerings.
  • The overall AI data training market is estimated to grow from $2.57 billion in 2024 to $13.45 billion by 2034, a CAGR of 18% 3. This indicates strong growth potential in the broader AI services market that Genpact can capitalize on.
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I thought CNXC might complement my G pick as I search for profitable companies that have products/service where integrating an AI platform will result in higher revenues.



I am more apt to build a larger position in one of these companies rather than build a small basket. There are chip producers/manufactures that have exposure to AI but prices are very high when you look at PE's. Perhaps ORCL is my best value play in AI as they house a lot of the data that AI needs; GOOG as well & I own both.
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