Elastic looks well-situated to capitalize on the generative AI craze overtaking Wall Street, according to Bank of America. On the heels of strong fiscal first-quarter print Thursday, analyst Koji Ikeda reiterated his buy rating and $78 price target on the software maker, citing growing AI monetization opportunities. “Elastic is likely establishing itself as a differentiated and strategic vendor for generative AI, which should enable it to deliver durable growth with expanding margins in the future,” he wrote in a Friday note. Elastic’s stock is up more 20% this year, with Bank of America’s price target implying 26% upside from Thursday’s close. The stock popped nearly 16% before the bell after topping fiscal first-quarter results, reporting 24% year-over-year cloud revenue growth. ESTC YTD mountain Elastic shares year to date Boosting Ikeda’s confidence in Elastic’s AI value proposition is positive commentary on deal activity and signs that hundreds of customers are already using its AI-focused products. He expects an acceleration in the company’s revenue growth trajectory in the second half of the 2024 fiscal year. “We believe the business has the ability to grow at an above software industry profile for the foreseeable future,” he said. — CNBC’s Michael Bloom contributed reporting.
