Bull of the Day: Grid Dynamics (GDYN)

Sometimes Wall Street gets so obsessed with the companies building the AI infrastructure that it forgets about the companies actually helping enterprises use the stuff. That brings us to today’s Bull of the Day, Grid Dynamics (GDYN).

Zacks Rank #1 (Strong Buy) Grid Dynamics is an AI and digital transformation company working with large enterprises to modernize applications, move workloads to the cloud and, increasingly, put artificial intelligence into production. This isn't just another company throwing “AI” into the investor presentation and hoping you buy the stock. The numbers are starting to back up the story.

Grid Dynamics delivered second-quarter revenue of $108.2 million, up 7% year over year and slightly above the high end of management's previous guidance. Even better, AI-related revenue reached a record 30.7% of total revenue and grew more than 50% year over year for the second consecutive quarter.

That’s the part that gets my attention. Enterprises spent the first couple years of the generative AI boom experimenting. Everybody had a pilot. Everybody had a chatbot. Everybody had a PowerPoint presentation about how AI was going to revolutionize their business.

Grid Dynamics Holdings, Inc. Price and Consensus

Grid Dynamics Holdings, Inc. price-consensus-chart | Grid Dynamics Holdings, Inc. Quote

Now comes the hard part, actually making it work. Grid Dynamics sits right in the middle of that transition. Management says customers are moving AI workloads from pilots into production, with its GAIN platforms gaining broader enterprise adoption. The company is targeting areas including agentic commerce, AI-driven software development and physical AI applications involving robotics.

That puts GDYN in an interesting spot. It doesn't have to win the large-language-model arms race. It doesn't have to build a $50 billion data center. It gets paid helping big companies figure out how to integrate all this technology into their existing businesses.

Forecasts are conservative, which we think could make this an under-the-radar pick this year. Current year revenue growth forecasts are only at 6.27% to $437.65 million. Next year’s number is forecast to tick up another 7.6% to $470.91 million. Translated over to the EPS side of things, current year Zacks Consensus Estimate calls for 5% growth to 42 cents, with next year swelling another 14% to 48 cents.

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This article originally published on Zacks Investment Research (zacks.com).

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