Xero Stock And 2 AI Software Picks Retail Investors Should Watch
Global manufacturing PMIs are picking up in key regions, while services look patchier. That tilt toward production puts the spotlight on the hardware, cloud capacity and software intelligence that power artificial intelligence. Investors who wait risk watching the next leg of the ChatGPT and AI stocks story from the sidelines. This article breaks down three stocks from our AI screener that illustrate how different parts of the AI stack intersect.
The stocks below are just a starting sample from the AI theme. The full screen surfaced 16 more companies with equally compelling narratives that are not covered here. If you want to move faster, head straight into the Artificial Intelligence/ AI Stocks screener to identify and analyze the highest conviction plays in the current AI build out.
SEEK (ASX:SEK)
Overview: SEEK is an employment marketplace that uses AI powered job ads, candidate matching and tools like Talent Search, SEEK Pass verification and the JobAdder applicant tracking system to connect hirers with suitable candidates across Australia, New Zealand and several international markets. While it runs a broad recruitment and HR platform, the clearest AI link is its Advanced job ads and matching engine, which apply machine learning to improve how roles and candidates find each other.
Operations: SEEK generates most of its revenue from Employment Marketplaces in ANZ at A$945.4 million, with a smaller but meaningful contribution of A$253.5 million from its Employment Marketplaces in Asia.
Market Cap: A$5.1 billion
SEEK provides exposure to AI where it directly changes how hiring works, through its Advanced ads and recommendation tools that aim to lift hirer yield and candidate engagement rather than just serving more job listings. The interest lies in how this AI led model and the freemium rollout in Asia might influence the path from higher A$1.28b scale revenue to sustainable profits after the recent loss of A$371.3 million. At the same time, the company carries meaningful debt and a dividend that is not covered by earnings, so investors may weigh the potential of an AI first recruitment platform against balance sheet pressure and execution risk in ANZ and Asia.
SEEK’s AI hiring engine is scaling on A$1.28b of revenue, yet the recent A$371.3 million loss and uncovered dividend raise big questions about how this story matures. Get the SEEK financial health report
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SEEK and the two other AI stocks in this list all came out of the same Simply Wall St filters, but the real opportunity is in building a setup that fits your own style. Use our flexible Screener to combine valuation, growth, balance sheet and risk checks, or rely on any of our curated Investing Ideas.
Xero (ASX:XRO)
Overview: Xero is a cloud based accounting platform for small businesses and their advisors, tying together bookkeeping, payroll, tax and payments with tools like Syft that use AI to turn raw accounting data into reports, forecasts, dashboards and financial insights. That makes Xero a direct way to follow how AI and ChatGPT style tools are being built into the day to day financial workflows of small businesses rather than sitting on the side as separate apps.
Operations: Xero generates NZ$2.75b from providing online solutions for small businesses and their advisors, with paying customers spread across Australia, New Zealand, the United Kingdom, the United States and other international markets.
Market Cap: A$14.5b
Investors watching the AI shift in small business software may want to pay close attention to Xero. Its Syft product and newer JAX and Industry Benchmarks features use AI to turn accounting data into automated insights, while fresh integrations with Microsoft 365, Claude and ChatGPT show how deeply AI is being threaded into the Xero platform. Forecasts in the market point to earnings growth, yet the stock trades on a very high P/E, so a lot of expectations around AI adoption and margin improvement may already be reflected in the current valuation. At the same time, rising AI investment, margin pressure and a balance sheet funded entirely by external borrowing mean execution quality matters. One question for investors is whether Xero will be able to convert its AI tools into stickier customers and more profitable growth over time.
Xero’s AI tools and premium P/E hint at a story that may not be fully priced in yet. Explore how growth expectations, margins and balance sheet pressure intersect in the analyst forecasts for Xero
CAR Group (ASX:CAR)
Overview: CAR Group runs online vehicle marketplaces and data services across Australia and multiple international markets, using AI driven valuation, inspection and advertising tools to connect buyers, sellers and dealers more efficiently. Its AI and data analytics engines sit inside SaaS, valuation and automotive data products that aim to improve pricing accuracy, lead quality and the overall vehicle trading experience.
Operations: CAR Group generates most of its A$1.25b revenue from Australia at A$517.6 million, with sizeable contributions from North America at A$326.9 million, Latin America at A$252.9 million, Asia at A$144.8 million and A$11.2 million from its Investments segment.
Market Cap: A$10.9b
CAR Group offers an example of how AI is being applied in the real economy, where machine learning is used in vehicle valuations, ad targeting and inspection services across a business generating A$1.25b of revenue and about A$313.7 million in net income. Investors get an established marketplace model tied to AI rich data assets and profit margins that reflect this data focus, but also need to weigh meaningful debt and a dividend that draws on those earnings. A key consideration is whether CAR Group’s AI driven data moat in markets such as Brazil, Korea and North America can support its valuation as more competitors operate online auto and mobility platforms.
CAR Group’s AI rich auto data and A$313.7 million in net income could be telling a different story to the headline marketplace label. See how earnings quality, cash demands and global expansion line up in the analysis report for CAR Group
Curious About What You Might Be Missing?
Fresh ideas move fast. Some are building quiet breakout momentum while others risk getting caught once prices start flying. Scan these under the radar for now picks and consider your options.
- Target resilient compounding potential by reviewing companies in the 10 resilient stocks with low risk scores before the crowd focuses on their steadier growth profiles.
- Chase yield while it still looks attractive by scanning the 5 dividend fortresses that focus on high income with robust underlying businesses.
- Hunt for potential future leaders among the 9 high quality undiscovered gems that combine solid fundamentals with limited attention for now.
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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