AI Stocks To Watch In UK Software As Enterprise Demand Grows

Artificial intelligence sits at the centre of many of the stories currently moving markets, from semiconductor driven export strength in South Korea to bond yield moves that influence funding costs for fast growing technology projects. Inflation, interest rate expectations and energy prices are shaping risk appetite, while AI related spending on chips, software, cloud and large language models remains a key talking point. This article focuses on stocks from an AI Stocks screener that targets companies directly involved in this ChatGPT and AI shift. It highlights three stocks that show how different parts of the AI chain may benefit over time.

Cerillion (AIM:CER)

Overview: Cerillion is a London based software company that supplies telecom operators and subscription businesses with pre-packaged billing, charging and customer management platforms, covering everything from AI supported product catalogues and analytics to end to end BSS/OSS solutions for both consumer and B2B services.

Operations: Cerillion generates most of its revenue from Software at about £22.6m, followed by Services at about £17.8m and Other income of about £2.0m.

Market Cap: £292.5m

Cerillion sits neatly in the AI theme by embedding tools like its Enterprise Product Catalogue and Business Insights platforms into the billing and operations backbone that telecom and subscription businesses rely on. The stock trades on a lower P/E than many software peers, which may appeal if you are looking for exposure to AI infrastructure rather than front end apps. The company also pays a dividend and has a long tenured board, although the reliance on external borrowing, non cash earnings and only 40% board independence are important flags to watch. That mix of AI exposure, current profitability and governance questions is what makes Cerillion worth a closer look.

Cerillion’s AI backed billing platform sits at the crossroads of infrastructure and applications, yet its P/E still trails many software peers. For more details, see the 4 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, along with the hardware like servers and laptops needed to run them. It also provides consulting, training and support so customers can run these technologies effectively across their businesses.

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

Market Cap: £931.5m

Bytes Technology Group gives you exposure to AI, cloud and cybersecurity spending through a profitable reseller and services model that already generates high quality earnings and very strong returns on equity. The business is closely aligned with major vendors like Microsoft and is expanding its AI focused software, security and public cloud offerings. It is also building new digital marketplaces and internal systems that may improve efficiency and upselling over time. At the same time, flat 2027 profit guidance, softer recent earnings, reliance on lower margin public sector work and changes to vendor rebate schemes show why recent broker downgrades deserve attention. That mix of quality metrics and execution risks raises the question of how Bytes can balance growth in AI and security against margin pressure and funding choices.

Bytes Technology Group sits at the crossroads of AI demand and margin pressure, yet the full picture is still easy to miss. Get the fuller story and risk context in the analysis report for Bytes Technology Group

AdvancedAdvT (AIM:ADVT)

Overview: AdvancedAdvT is a London based software group that provides business, workforce and healthcare compliance platforms, including AI based healthcare intelligence tools, to customers across the UK, Europe, North America and other international markets.

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

Market Cap: £224.4m

AdvancedAdvT is closely associated with the AI theme because it applies AI to healthcare intelligence and compliance, on top of a wider suite of cloud based business and workforce software. Forecast earnings growth of about 32% a year and a share price that sits below one estimate of future cash flow value are factors that may attract investors, even with a high P/E multiple. At the same time, margins have compressed, recent earnings fell sharply and results include a number of one off items, all supported by higher risk external borrowing and a low 3% ROE. That mix of high growth forecasts, funding risk and AI exposure is one reason why AdvancedAdvT may warrant closer scrutiny.

AdvancedAdvT pairs ambitious AI driven healthcare tools with earnings that currently lean on higher risk borrowing and a low 3% ROE. Get the context on how that trade off could evolve in the analyst forecasts for AdvancedAdvT

The three AI stocks in this article are only a starting point, since the full Artificial Intelligence/ AI Stocks screener surfaced 15 more companies that each carry their own compelling AI driven narratives across chips, software, cloud and LLMs. Use Simply Wall St to identify the specific catalysts and storylines that matter to you, then analyze and filter these AI stocks so you can focus on the opportunities that best match your views on the ChatGPT and AI shift.

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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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