3 UK AI Software Stocks Worth A Closer Look

Artificial intelligence sits at the center of many of today’s market stories, from record semiconductor trade flows to fresh demand for cloud and software as companies rethink how they work. At the same time, higher global yields, energy price shocks and shifting inflation expectations are reshaping how investors think about risk. The AI Stocks screener focuses on companies directly involved in this ChatGPT and AI build out, including chips, large language models, cloud and transformation software. In this article, you will see 3 stocks from the screener that illustrate how different parts of the AI chain can fit into a modern portfolio.

Cerillion (AIM:CER)

Overview: Cerillion is a London headquartered software company that provides billing, charging and customer management systems to telecom operators and subscription businesses worldwide, helping them run complex services like quad play bundles, IoT connectivity and smart city networks on a pre packaged, cloud ready platform.

Operations: Cerillion generates the bulk of its revenue from Software at about £22.6m, supported by £17.8m from Services and £2.0m from Other activities.

Market Cap: £310.2m

Cerillion provides exposure to the plumbing behind the AI and data heavy telecom world, with reported net margins around 32%, forecast earnings and revenue growth, and an AI infused product suite that underpins transformation projects such as Omantel’s Techco shift. The stock trades on a P/E that is lower than many direct peers, while analyst targets indicate potential further upside and returns on equity above 20% indicate efficient use of capital. At the same time, investors need to weigh issues such as high non cash earnings, concentrated external funding and a board that is less independent than some might prefer, which could matter more as the company scales its AI ambitions.

Cerillion’s healthy margins, reported forecast growth and lower P/E hint at a story many investors may be underestimating, but the real twist sits in the 2 key rewards and 1 important major warning sign

Bytes Technology Group (LSE:BYIT)

Overview: Bytes Technology Group is a UK based IT reseller and services company that helps organisations buy and manage software, security, AI and cloud solutions, alongside the hardware like servers and laptops needed to run them. It also supports customers with training, consulting and software asset management so they can control costs and keep systems secure.

Operations: Bytes Technology Group generates virtually all of its £220.6m revenue from its IT Solutions Provider segment, with about £211.9m coming from the United Kingdom and the remainder from Europe and the rest of the world.

Market Cap: £972.3m

Bytes Technology Group sits at the intersection of AI, cloud and cybersecurity, helping corporate and public sector customers modernise their tech stacks while managing complex Microsoft, cloud and security spend. Analysts expect mid single digit earnings growth and see the current share price below both their consensus target and an estimated future cash flow value. This points to potential upside if AI and security demand holds up. At the same time, the company is dealing with pressure on net margins, flat profit guidance for 2027 and a greater tilt toward lower margin public contracts, so execution on higher margin cybersecurity and services is a key focus. For investors, the real question is how these cross currents add up in the analysis report for Bytes Technology Group

Bytes Technology Group’s earnings growth story and pressure on margins can make the balance between AI upside and contract mix easy to misread, so it is worth seeing how the full picture stacks up in the 3 key rewards and 1 important warning sign

AdvancedAdvT (AIM:ADVT)

Overview: AdvancedAdvT is a London based software group that provides business, financial management and workforce management tools, as well as healthcare compliance and intelligence platforms. It also runs a machine learning based intelligent process automation platform for customers in the UK and overseas.

Operations: AdvancedAdvT generates all of its £53.4m revenue from Internet Software & Services, with sales currently reported entirely from the United Kingdom.

Market Cap: £207.9m

AdvancedAdvT catches the eye because it combines a focused internet software business, including an AI powered automation platform, with revenue of £53.4m and earnings that analysts expect to grow 32.04% per year. At the same time, it is currently trading about 25.6% below an estimated cash flow value. The company is working through a sizeable one off £5.6m loss, a drop in net margin from 25.1% to 8.6% and a relatively low 3% return on equity, alongside higher risk external borrowing. For investors, the key issue is how that mix of forecast earnings growth and premium P/E fits with volatile profits and funding choices as AdvancedAdvT develops its AI platform.

AdvancedAdvT’s fast projected earnings growth and premium P/E do not fully square with its thin 3% return on equity and recent profit volatility, so see how that tension plays out in the analyst forecasts for AdvancedAdvT

The three stocks highlighted here are just the starting point, as the full Artificial Intelligence/ AI Stocks screener surfaces 15 more companies with equally compelling AI narratives through the Artificial Intelligence/ AI Stocks screener. Use Simply Wall St to identify, filter and analyze the specific catalysts and AI use cases that matter to you. This can help you focus on the highest conviction opportunities across chips, software, LLMs, cloud and transformation plays.

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Seeking Fresh Alternatives Beyond These AI Stocks

Markets move fast, and the next breakout stock themes can shift before most investors notice. Use curated screeners to spot fresh momentum while it matters, and get in early.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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