Down 41%, Is This AI Stock a Buy?

Core Viewpoint - Amplitude's new AI analytics platform, Agentic, is positioned as a significant advancement in digital product analytics, despite the company's stock facing a 41% decline this year amid broader software market challenges [2][13]. Financial Performance - In Q4, Amplitude reported a revenue growth of 17% to $91.4 million, exceeding estimates of $90.4 million, while adjusted earnings per share improved from $0.02 to $0.04, though still below the consensus of $0.05 [4]. - The company achieved record free cash flow of $23.5 million for the year and $11.2 million in Q4 [4]. - For Q1, Amplitude projects revenue between $91.7 million and $93.7 million, indicating a 16% growth, and anticipates full-year revenue of $390 million to $398 million, or 15% growth [6]. Strategic Initiatives - Amplitude has revamped its pricing and packaging strategy, leading to a 35% increase in remaining performance obligations, now totaling $417.7 million, reflecting growing customer confidence [5]. - The launch of the Agentic AI Analytics platform aims to consolidate digital analytics solutions and leverage the largest database of user behavior [8][9]. AI Analytics Platform - The Agentic AI Analytics platform utilizes coding assistants from companies like Anthropic and OpenAI to provide features such as the Global Agent, which offers instant insights and can create dashboards and analyze customer journeys [9]. - Customer feedback on the AI analytics has been positive, with agentic queries rising from almost none in October 2025 to 25% of total queries today [10]. Market Position and Outlook - Amplitude's stock has been affected by a broader software sell-off, losing 41% year-to-date, yet the company continues to execute well and show solid growth [11]. - To capitalize on the current stock price, Amplitude announced a $100 million share buyback, representing 11% of shares outstanding, and holds $192 million in cash and marketable securities [12]. - Despite uncertainties in the software sector, the new AI analytics platform presents significant disruptive potential, making a small investment in Amplitude appear strategically sound [14].