Why Needham Backed Similarweb's AI Ambitions Despite Ongoing Profitability Struggles

Similarweb Ltd. (NYSE:SMWB) is one of the best‑performing small‑cap tech names over the past few years, and its latest developments caught renewed analyst interest.

On November 17, Needham & Company LLC reiterated a “Buy” rating on Similarweb, with a price target of $14.00. Their bullish stance was driven by what they called a substantial “large language model (LLM) data opportunity,” which they estimate could become a near‑$1 billion revenue stream over time. Needham also pointed to improved go‑to‑market execution and early signs of better customer retention, which may boost revenue retention metrics heading into fiscal 2026.

This rating came just days after the company’s Q3 2025 earnings (released Nov 11), in which Similarweb reported EPS of $0.05, beating consensus of $0.02, while generating $71.79 million in revenue, just shy of the ~$71.95 million analysts expected.

Still, the quarter was marked by a negative net margin of –11.2% and a negative return on equity of –78.25%, underscoring that profitability remains elusive even as top‑line and per‑share metrics slightly beat expectations.

Similarweb Ltd. (NYSE:SMWB) offers a cloud‑based digital intelligence platform that aggregates and analyzes web and app traffic data from millions of sites and applications globally. Businesses, marketers, and analysts use its insights to track market trends, benchmark competitors, optimize digital strategy, and make data‑driven decisions.

While we acknowledge the potential of SMWB as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.