Bandwidth (BAND) is my favorite AI play right now.
The chart looks really bad! I get it. Today, it trades for below even its IPO price.
But the reason why I think it's an AI play ready to double, possibly triple, is a fundamental reason that I'll explain in this post.
First of all, let me state something very interesting about Bandwidth - today it's one of the worst performing stocks in the entire market since 2020 and 2021. I don't entirely know why that's the case, but I do think the market has overreacted.
Let me now get the bad news out of the way: when BAND's stock was flying high, management took out several large loans to expand faster and grow globally. Those gains are starting to be realized, but it's key to mention this as the debt profile is still somewhat high. The question now is: can they keep paying it off? They're on target to have little to no debt within the next few years.
Okay, so why is Bandwidth an AI play? To understand this you need to know that Bandwidth is essentially the connector for data that is transmitted over the web. Bandwidth's platform helps data, messages, voice calls, video calls, email, and more travel from Point A to Point B.
For example, when you make a call on Zoom or even Slack or Google Hangouts, it's highly likely your call is being routed over Bandwith's network. The point is, Bandwidth is the toll keeper, the train conductor, for most modern communications that are triggered at scale.
So how does AI fit into this?
That's where this gets good. All of these AI companies NEED a company to help deliver the information to their end consumer. If OpenAI creates a chatbot that works on text message or sends push notifications or can even speak over calls, Bandwidth will most likely be the resource that delivers that information from business to consumer.
What's even more interesting is call centers and the future of talking to call centers to get help or support. In one scenario, you upload all your most frequently asked questions, pair it with an AI service, and then let users call that AI service over the Bandwidth network and now an AI customer support agent is solving issues at scale.
This is just one example.
I could go on and on.
But that's my play!
I own a little Bandwidth and will be watching closely in the coming years.
Trade active
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Stop is below $10.00.
Take profit is $25.00.
Timeframe is as long as it takes for either of those to play out.
Reminder: I am NOT giving advice or a recommendation. This is just a hobby of mine and I have a small trade to share. Let's see how it does...
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The latest earnings report was incredibly impressive. The trade remains active:
Bandwidth Non-GAAP EPS of $0.16 beats by $0.12, revenue of 146M beats by 5.13M
The whole report is interesting to read
I remain in the position (see my stop and take profit above)
Comment
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Note to new readers: Don't chase! There will always be time.
Comment
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Still holding! What a reversal off the highs after that mega earnings report. I wonder what happened.
Trade closed: stop reached
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Well.... that was quite the trade! From doing well to down. As mentioned above in July, my stop was below $10. I was stopped out today. On to the next one! No one wins every single time.
I liked your blog. any thoughts of getting back in? , I'm in band now. the winds might be picking up for a stock like this.
zAngus
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Lot of upside potential if it runs.
SquishTrade
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Rooting for this idea! :) I've been fairly uninformed about BAND or this particular technology. So thanks for the educational overview of this part of the AI ecosystem.
scheplick
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@SquishTrade, I always find that interesting - no one really knows what the company actually does!
AMIT-RAJAN
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Much satisfied by the fundamental reason provided in this idea, many thanks for sharing nice publication