Artificial intelligence leader Twilio — along with fellow AI stock Wix and Paylocity — headline this week's industry analysis.
Stock picks come from Investor's Business Daily's Computer Software-Enterprise industry group, which ranks No. 9 out of 197 groups. Historically, winning stocks are in the top 40 industry groups, so focus your research in that section of the performance table.
To find a stock's industry ranking, you can use IBD Stock Checkup. The MarketSurge chart is another good resource.
AI Stock Eyes Buy Point
Twilio's tools enable app developers to embed voice, text messaging and video into their products. In addition, Twilio's software makes it easier for cloud-based applications to communicate. Meanwhile, Twilio is focusing on the future of customer engagement through AI.
Following a powerful breakout move on Oct. 31, shares now are consolidating near their recent highs. Twilio stock is putting the finishing touches on a flat base that will offer a 116.43 buy point.
On Oct. 31, Twilio reported third-quarter earnings and revenue that topped estimates and raised its full-year revenue outlook.
"Twilio appears to be turning a corner and is beginning to see sustained improvements across the business, primarily fueled by product innovation in areas like personalization, real-time data analytics, and message deliverability," William Blair analyst Arjun Bhatia said in a recent report to clients.
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Wix Stock Nears Entry
Wix operates a freemium software-as-a-service business model. While a free, ad-supported website builder is available, the company aims to convert users to a paid plan that offers more professional-looking custom features.
In the latest quarter, Wix's earnings jumped 36% vs. the year-ago period to $1.50 per share on revenue of $444.7 million. Sales increased 13%.
Meanwhile, the company is pivoting to more AI products.
"Wix's Q3 was strong with a strong beat and raise in terms of bookings and free cash flow," RBC Capital Markets analyst Brad Erickson said in a report. "Most favorably, the company's strong AI narrative continues to resonate and importantly, reconcile with the numbers where the price increase is going better than expected."
He added: "The company is seeing strong sign-ups and better conversion driven by AI. It has more AI-based products on the way in 2025 for all parts of the subscription business and continues finding leverage as its customer economics improve within subscription services."
Wix stock is building a flat base with a 229.79 buy point, per IBD MarketSurge. Shares are about 2% away from that entry.
Bullishly, the stock's RS line is already at highs ahead of a potential breakout. That triggers the RS Line Blue Dot on the MarketSurge weekly chart.
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Outside AI Stocks: Paylocity Forms New Base
Finally, payroll software provider Paylocity continues to form a new base following big gains in recent months. Paylocity stock is building a flat base that has a 215.68 buy point, per IBD MarketSurge chart analysis. But the stock is below its 50-day line, an important benchmark to monitor.
The company's annual earnings are expected to grow just 1% in fiscal 2025, with an increase of 8% in fiscal 2026, according to IBD MarketSurge.
Follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on AI stocks, other best stocks to buy and watch and the Dow Jones Industrial Average.
