1 Under-the-Radar AI Stock That Looks Like a Screaming Buy Right Now

Amplitude (AMPL) reported robust Q3 results, with revenue growing 18% to $88.6 million and adjusted EPS of $0.03, both surpassing analyst expectations, marking its fastest revenue growth in over two years. This acceleration is primarily driven by the successful launch of its new AI platform, which includes tools like Model Context Protocol, AI Visibility, and AI Feedback, significantly boosting customer engagement and demand for advanced analytics. Remaining Performance Obligations (RPO) jumped 37% to $391.9 million, reflecting increased customer commitment. The company's strong guidance and current valuation (4x P/S) suggest its AI initiatives are well-positioned to capture the expanding AI software market, potentially driving further upside.

Analysis

Amplitude (AMPL) reported robust third-quarter results, with revenue growing 18% year-over-year to $88.6 million, significantly exceeding the $86.3 million consensus. This marks the company's fastest revenue growth in over two years, indicating accelerating momentum. Adjusted earnings per share (EPS) also surpassed expectations, rising to $0.03 against a $0.01 consensus.

The strong performance is largely attributed to the successful launch of Amplitude's new AI platform, featuring tools like Model Context Protocol (MCP), AI Visibility, and AI Feedback. MCP, identified as the most requested customer feature, is already seeing significant adoption, expanding access to the platform. This strategic AI integration is directly addressing customer demand for enhanced analytics capabilities.

Future demand indicators are strong, with Remaining Performance Obligations (RPO) jumping 37% to $391.9 million, reflecting increased customer commitment to longer-term contracts. The company provided optimistic guidance, projecting Q4 revenue of $89 million to $91 million and adjusted EPS of $0.04 to $0.05. Despite competing with larger players like Google Analytics, Amplitude's current market capitalization of $1.3 billion and a price-to-sales (P/S) ratio of 4 suggest an affordable valuation relative to its growth potential if AI adoption continues.

Key Decisions for Investors

• Monitor Amplitude's AI platform adoption and its direct correlation to continued revenue acceleration, as this is a key driver for future stock performance.
• Evaluate the company's competitive positioning against larger analytics providers, considering its "affordable" 4x P/S ratio in light of its specialized AI offerings.
• Observe RPO growth in subsequent quarters as a leading indicator of sustained customer commitment and the effectiveness of its AI-driven product strategy.