The Hidden AI Play That Most Investors Overlook

Join TradeAlgo's Free Live Trading Session ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ [EARN WHILE YOU LEARN! JOIN OUR FREE LIVE TRADING SESSION!]( Hello investor, The Hidden AI Play That Most Investors Overlook Wall Street traders held back any big bets yesterday ahead of the big jobs report due this morning. However, yesterday delivered some economic data. Jobless claims came in higher than expected, hinting at a cooling labor market. Labor costs rose less than the previous reading. In the graphic below, you can see how productivity grew (red) while unit labor costs (black) declined. (Source: Bloomberg) It was not the first set of economic data that painted a picture of a cooling labor market. Hiring intentions this year through May plunged 50% from the same period last year, according to a report by Challenger, Gray & Christmas, Inc. What’s more, companies announced plans to hire 50,833 workers so far in 2024 — the fewest for that period in a decade. So, Wall Street will see if today’s jobs report will match the recent data points. Economists expect the US to add 180,000 jobs in May while keeping the unemployment rate unchanged. There is a double-edged sword to a cooling labor market. It may help inflation cool down, but too much of a cooldown can tip the economy into a recession. It would be fatal for stocks since the valuations are already lofty. - “A slowing in the job market, and even an increase in unemployment, should be welcome to the extent that it alleviates some upwards pressure on inflation,” said Chris Zaccarelli at Independent Advisor Alliance. - “But we are aware that too much weakness in the labor market and in the economy could eventually prove to be an even greater threat to markets than inflation.” Chris Zaccarelli at Independent Advisor Alliance (Photo: Bloomberg) Oscar Munox and Gennadiy Goldberg at TD Securities believe that the markets are likely to react to a weaker-than-expected print. If it is slightly weaker, the markets may trade in a range but the reaction could be more volatile if it was way weaker. - “We look for payrolls to continue to lose momentum,” said Oscar Munoz and Gennadiy Goldberg at TD Securities. “Markets will likely react more to a weaker print than strong data, but data likely needs to be much weaker given that investor expectations have declined.” Right now, Wall Street is still betting on an ideal scenario — a “moderating (but positive) growth” said Ed Clissold at Ned Davis Research. It would lead inflation to come down to the 2% target without tipping the economy into a recession. - “If it’s because of a slowdown in inflation, it can be bullish for stocks. But if the Federal Reserve cuts because of a slowdown in growth, it’s not good news for corporate earnings,” said Matt Maley, chief market strategist at Miller Tabak + Co. A Top Secret AI Play That Almost Nobody Is Talking About Today’s Stock Pick: [Wix.com]( (WIX) Many investors are overlooking Wix as an AI play because it is not a Big Tech company. But listen up… Many companies are struggling to turn AI into blockbuster products, but Wix is already using AI to create “magic.” Wix is a platform where people can create websites instantly. It is a drag-and-drop website builder, so there’s virtually zero code required. Now, Wix has launched a new AI product where businesses can simply tell its chatbot to build an app based on written instructions. It’s like telling a human designer to build it for you. But only this time, it costs 10x less and it builds 10x faster. (Source: Inc) Once the app is built, users can easily edit the app using Wix’s easy-to-use tools. And the app is fully native to either iOS or Android platforms. (Source: Wix) Wix also launched the similar concept for websites last July. In short, you can simply type down what you need from a website, and the AI will build it for you instantly. Isn’t it remarkable? Indeed, Wix is very ahead in the AI race. The company itself is a wonderful business, as well. Revenues grew steadily since Q1’22 with the most recent quarter growing by 12% year over year: (Source: Wix) Wix also expects 2024 to show a 11-13% year-over-year revenue growth: (Source: Wix) Notably, Wix is monetizating its users more and has shown abilities to keep users on the platform and grow their bookings through innovation and product offering enhancements. In the graphic below, you can see how users are reaching $200+ monetization quicker and quicker. (Source: Wix) At the same time, Wix has built a powerful marketing engine. It turns a new customer acquisition into a 0.9x ROI after just one quarter. After five quarters, the ROI climbs to 2.5x due to increased spending from these same customers. The ROI jumps to 4.1x after 17 quarters. It is a remarkable ROI number considering the fact that it can take some businesses one year to see a positive ROI on its marketing spend. (Source: Wix) Believe it or not, Wix expects ~$16.2 billion in future bookings over 10 years from the current customer base. Its 2023 revenue was $1.56 billion. These are very, very solid numbers since it doesn’t factor in new customers from now on. (Source: Wix) An investor can bank on this number because Wix has steadily increased its net revenue retention since 1016. It is now at +105% — a huge improvement since 2016: (Source: Wix) Now, Wix has focused on improving operating metrics. In the graphic below, Wix is starting to turn profitable after posting small annual losses since 3Q’13. (Keep in mind that Wix posts these small losses for tax benefits.) But the company has just turned profitable with a positive EPS in the recent quarter. (Source: MacroTrends) The trend is poised to continue. Wall Street analysts expect a 21.9% increase in EPS for 2025 from 2024. The EPS estimate is also trending up — a strong, bullish sentiment. (Source: Yahoo Finance) Bottom line: Wix has lots of the features of a compounding stock. It is turning profitable. It has blockbuster AI products. EPS estimates are trending up. The company can keep its customers for a long time. What’s there not to like about the stock? [EARN WHILE YOU LEARN! JOIN OUR FREE LIVE TRADING SESSION!](       © All Rights Reserved, Trade Alliance [Unsubscribe]( | [Manage Preferences](