One of My Favorite AI Plays Hasn't Gone Anywhere in 3 Years

Sometimes, trading is boring. The same can be said for investing as well. I first got interested in Bandwidth when AI was starting to emerge about 2+ years ago. I found their approach and AI product interesting because they quickly started building voice at scale for AI products by providing the "piping" to quickly connect AI interfaces to voice applications across web, desktop, mobile, and cell operators. Seems like a no brainer right?

Not so fast.

While some stocks trade on lofty expectations and big stories, others also simply trade at a "fair" value. For one reason or another Bandwidth has continued to trade at a fair value even despite most recently hitting record revenue, record free cash flow, record customers, and record earnings.

The markets are designed to confuse people most of the time. In their most recent earnings report the founder and CEO said:

"Let me share two recent wins that showcase this for AI. First, one of the world's largest cruise lines chose Bandwidth for their first ever cloud contact center migration and they did it right before their peak holiday season. That is the ultimate vote of confidence.

They chose us for three reasons, our proven CCaaS integration capabilities, our comprehensive communications offering and our track record of mission-critical reliability. But what really sealed the deal was our ready to deploy voice AI capabilities, positioning them for future innovation.

Second, a Fortune 25 healthcare provider needed to switch between cloud contact center platforms, traditionally a massive undertaking. Because Maestro is pre-integrated with leading CCaaS platforms, we made this transition seamless. Their legacy provider quoted months for the same project. Even more compelling, our platform enables them to integrate AI capabilities that were simply impossible with their previous solution."

Currently, the company is valued around to 8x-11x EV/EBITDA. Some of might say it's fairly valued there. Others might say it should have more bullish backing from the market.

Anyways, that's it. And a reminder... sometimes things just go sideways for a long time.

Tracking some of my holdings in real-time. More coming soon.