The correction of the AI market is an early and important test of the intensity of investors in the space. While even some of the biggest tech stocks with an AI footprint have lost ground in recent weeks, smaller and less proven names may be especially volatile.
For aggressive AI bulls that aren't afraid to take some risks amid the turmoil, there may be opportunities to buy the dip and ultimately reap big rewards.
Little-known AI software companies may be a good place to start searching for potential candidates, although it helps to be sure that these companies have solid foundations. Each of the companies below had a recent rating upgrade or target increase by one or more Wall Street analysts.
Out of a Crowded Field of Competitors, Klaviyo Finds a CRM Niche
Company Klaviyo Inc. NYSE: KVYO uses a customer data platform and provides marketing automation software used by e-commerce businesses. The company's tools help clients personalize communications and customer support using AI. This makes Klaviyo a competitor of the same big rivals Salesforce NYSE: CRMalthough it caters more to smaller companies than those looking for business customer relationship management (CRM) solutions.
Klaviyo Today
- 52 week interval
- $12.53
▼
$36.76
- Target Value
- $30.95
In the past few weeks, KVYO shares have seen a new buy rating from analysts at Goldman Sachs and a $3 target increase from Citigroup. The stock has an Average Buy rating, with 18 buys compared to just three other ratings. Wall Street sees about 65% in KVYO, a big turnaround after the stock fell nearly 40% year-to-date (YTD).
Klaviyo's fundamentals may support this kind of growth, as seen in its Q1 2026 earnings report—revenue rose an impressive 28% year-over-year (YOY) while the company achieved its highest non-GAAP operating margin ever. Management also raised full-year guidance for revenue and operating profit, citing the strength of the company's AI-driven products such as Composer and Customer Agent.
The catalyst from the earnings report may help reverse the recent decline, but Klaviyo must face the question of carrier costs, which the company has taken so far but could become a serious threat as its business grows.
High Risk, High Reward Proposition on the same web
The smallest of the three companies and somewhat the riskiest for investors in this category, Similarweb Ltd. NYSE: SMWB uses AI to collect and analyze data from internet traffic, app usage, and more to provide business customer analytics tools. Its proprietary dataset is a strong asset, along with its ability to serve clients across business enterprises, investor groups, government agencies, and more.
Same Web Today
- 52 week interval
- $2.22
▼
$10.75
- Target Value
- $8.07
A big price hike targeted by Citigroup analysts in July may have helped increase SMWB's visibility among investors, but the stock remains the overall consensus hold. Interestingly, it has largely prevented the AI industry dip and is only down about 5% YTD, while maintaining a strong 17% peak.
In June, Similarweb announced multi-year business contracts representing $47 million in total contract value recognized over the next three years. This is a major development for the company and a sign that it is gaining recognition for its ability to train majors in linguistics (LLMs). If it can maintain this trajectory, the company may be able to accelerate revenue growth beyond its 10% YOY improvement from the last quarter.
Braze Builds Stability Between Growing Revenue, Margins, and Free Cash Flow
Braze Today
- 52 week interval
- $15.26
▼
$37.33
- Target Value
- $34.76
Braze also appears to have the strongest ratings profile of the three companies, with 19 buys and one sell. Analysts at JPMorgan Chase raised their price target in early July, bringing the potential upside based on the consensus price of $34.76 to nearly 40%.
With revenue of $211 million last quarter, an improvement of 30% YOY, Braze also has a strong sales base. Berries are doing well, management expects a 400 basis point expansion in operating margin for the full year. Free cash flow is also emerging, and Braze noted $27 million in this area in its latest earnings report. This is all due to strong customer momentum, comprehensive add-ons, and the company's outstanding AI products. While competition remains fierce, Braze is establishing itself as a strong choice among smaller AI software providers.
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