WalkMe – A Digital Transformation Stock

When artificial intelligence becomes pervasive, can we then stop talking about “AI startups?” The answer appears to be no. It’s becoming increasingly common to see companies tout their AI chops when it comes time to raise capital. “Artificial Intelligence Startup Leads Wave Of 4 IPO Candidates,” said Law360 which talks about the coming initial public offering (IPO) of an Israeli firm called WalkMe. Before we dig into their juicy S-1 filing document, let’s talk about “AI stocks.”

Defining an AI Stock

We’ve always believed the only way to prove a company is adding value by using AI is by demonstrating a product or a service that’s exponentially better than other alternatives, and that’s selling like hotcakes. Revenue growth – a proxy for capturing market share – is probably the best demonstration that a company has built something of value. At that point, does it really matter if they’re using AI? It does, and here’s why.

The core value proposition of an AI algorithm is that it constantly gets better over time. Think about how powerful that statement is. A tool that you use only gets better the more you use it. For that to happen, you need loads of delicious big data. All companies generate data exhaust, therefore all companies stand to benefit by applying AI to their (ideally proprietary) datasets. First movers should outlive their competitors because they have a head start, and they’ll quickly emerge as leaders. We invest in these leaders, then use the proceeds to buy a casa on the playa. That’s the general plan. So, how can we gauge how much value AI sta