Pega – Using AI for CRM and Process Automation

There’s a term we often use here on Nanalyze, “pure play”, which refers to the exposure any given stock has to a particular investment theme. Take Illumina for example. They build machines that are used to read genetic information. Since Illumina has around an 80% market share selling their sequencing machines, we can be assured that most companies involved in genetics are using Illumina’s equipment making them a “picks-and-shovels” play on genetics. Since Illumina makes nearly all their money on sequencing machines and consumables, this also makes them a “pure play” for investors who want exposure to the genetics story.

Just because you have a pure-play stock doesn’t mean it will outperform the market, but companies with strong market share don’t have to worry so much about competitors since they usually have the resources to fight them. Another example of a “pure-play” stock with strong market share is Nvidia and their dominance in selling GPUs which are used for artificial intelligence, making them a picks and shovels play as well. In order to assess the “pure play” aspects of a stock for any particular theme, we might ask questions like:

  • What percentage of revenues can be attributed to the theme?
  • Are they a “picks-and-shovels” play on the theme?
  • What sort of market share has the company secured?

While any company can start plastering references to artificial intelligence (AI) in their investor materials, we’re only interested in those companies that

Become a premium member and get access to hundreds of premium articles, reports and additional content.

Nanalyze Premium is your comprehensive guide to investing in disruptive technologies. Read by the top investment banks, management consultancies, VCs, and research houses. Trusted by over 100,000 institutional and retail investors. Covering disruptive technologies for over 18 years.