Jefferies Trims Kingsoft Cloud (KC) price target and purchase rating continues

Jeffrey’s analyst Thomas Chon said in a statement on Kingsoft Cloud Holdings Ltd (NASDAQ:KC) The purchase rating was maintained from $18 to $16 on May 28th. The adjustment comes just hours after the company’s first quarter results were announced.

Computer engineers sitting in front of several connected consoles show the depth of the cloud services the company offers.

Kingsoft Cloud quarterly revenue increased 10.9% year-on-year, but fell 11.7% more than quarter. Management was attributable to a continuous decline in seasonal factors and timing issues associated with product delivery in the enterprise crowd segment.

However, despite the challenges, the company’s CEO, Tao Zou, believes the future of its cloud business is strong. He said, “The importance of cloud services as an infrastructure for AI-ERA has gained greater traction.” As such, the company is “fully committed to AI-related investments and high quality, sustainable business development.”

Chung also touched on this aspect in his research notes. He highlighted the strong demand for Kingsoft Cloud’s AI services despite trimming price targets. In particular, the company’s AI business total billing increased 228% year-on-year to RMB525 million ($72.975 million). He also said Kingoft Cloud’s new approach to lease could potentially reduce gross profit margins, but could reduce reliance on cash reserves. With the current price target set at $16, Jeffries’ valuation reflects Kingshoft Cloud’s financial position and evolving market conditions.

Kingsoft Cloud Holdings Limited (NASDAQ: KC) is a leading cloud service provider in China. The company offers products such as Infrastructure as a Service (IAAS), Platform as a Service (PAAS), and Enterprise Cloud Services. These products incorporate advanced technologies such as AI, big data, IoT, and edge computing.

While Kingsoft Cloud Holdings Ltd (NASDAQ: KC) has recognized its potential as an investment, our conviction lies in the belief that some AI stocks offer higher returns and hold a greater prospect of limited downside risk. If you’re looking for AI stocks that are more promising than KC and have a potential of 100 times upside, then Cheapest AI stocks.

Read next: Best AI stocks to buy now and According to the billionaire, 30 best stocks to buy now.

Disclosure: None.