Why Artificial Intelligence (AI) Elastic Stock was a winner today

On monday, Elastic (ESTC 1.71%) Shares got a boost ahead of the quarterly earnings report. An analyst reiterated his bullish view on the artificial intelligence (AI)-powered business software specialist, and the market reacted in kind. Investors boosted the share price by 1.7%, which contrasted favorably with the benchmark’s 0.3% decline. S&P 500 index.

The optimistic expert’s vision was reiterated

That day, Rosenblatt’s Blair Abernathy published a new research note on Elastic. In the analysis, he reiterated his buy recommendation on AI shares and his price target of $136 per share. This anticipates an increase of almost 27% from the most recent closing price.

Elastic is currently preparing to release its fiscal first quarter 2025 fundamentals on Thursday after the market closes. Abernathy wrote that he expects the company to perform in line with estimates, “as we believe that in the last quarter it continues to experience prolonged enterprise sales cycles, budget control around spending on digital transformation programs and weakness in the small business segment and the middle ones. “

That sounds like it could be a negative, but then again, the analyst is modeling double-digit revenue growth (28%) for the company’s Elastic Cloud offering, which isn’t far off from Q4’s 32%.

Peak growth expectations

In his analysis, Abernathy also pointed out that Elastic has seen a pullback from its customers’ optimization efforts. Instead, these customers focused more on factors such as cost, operational efficiency and tool consolidation.

Collectively, forecasters following Elastic’s stock expect the company to report 17% year-over-year revenue growth, though they’re modeling a bumpy move — they expect net income per share to match the quarter’s ago at $0.25.