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

Amplitude (NASDAQ: AMPL) reported robust Q3 results, with revenue increasing 18% to $88.6 million, surpassing analyst estimates, and adjusted EPS of $0.03. This represents the company's fastest revenue growth in over two years, largely attributed to the successful launch and positive customer reception of its new AI platform, which includes features like Model Context Protocol. Remaining performance obligations surged 37% to $391.9 million, and strong Q4 guidance was provided, indicating accelerating momentum and customer adoption of its AI-driven product analytics solutions, positioning the stock, currently at a price-to-sales ratio of 4, for potential re-rating.

Analysis

Amplitude (NASDAQ: AMPL) reported robust Q3 results, with revenue growing 18% year-over-year to $88.6 million, significantly exceeding the $86.3 million consensus and marking its fastest growth in over two years. Adjusted EPS also surpassed expectations at $0.03 against a $0.01 consensus. This accelerated momentum is directly attributed to the successful launch and positive customer reception of its new AI platform.

The company's strategic focus on AI is evident through its new platform, featuring the highly requested Model Context Protocol (MCP), AI Visibility, and AI Feedback tools. Remaining Performance Obligations (RPO) surged 37% to $391.9 million, indicating customers are committing to longer-term contracts and validating Amplitude's enhanced execution and AI-driven product analytics solutions. CEO Spenser Skates emphasized strong customer demand for these innovative AI capabilities.

Amplitude provided strong Q4 guidance, projecting revenue between $89 million and $91 million, representing a 15% year-over-year increase, alongside adjusted EPS of $0.04 to $0.05. Despite competing with larger players like Google Analytics, the stock currently trades at an attractive price-to-sales (P/S) ratio of 4, suggesting potential for a re-rating if its AI platform continues to drive traction and revenue acceleration.

Key Decisions for Investors

• Monitor continued customer adoption and revenue contribution from the new AI platform, as this is a key driver for future growth and potential multiple expansion.
• Evaluate Amplitude's competitive positioning against established analytics providers, particularly how its AI features differentiate its offering and capture market share.
• Consider the current valuation of a 4x P/S ratio in light of accelerating growth and strong RPO figures, which may present an attractive entry point for long-term investors.