Bank of America says investors should keep an eye on leading automotive software stocks before a multiyear adoption cycle of artificial intelligence (AI)-enabled dash cam technology. “Samsara (IOT) is revolutionizing road safety,” analyst Matt Block wrote in a note Thursday. “While dash cam hardware is relatively commoditized, the secret is the company’s software, which provides real-time coaching with in-car voice alerts if the driver becomes distracted or gets too close to another vehicle.” Though the stock is down more than 13% this month and 12% year to date, Block initiated a buy recommendation on the company’s shares with a $37 price target, which would imply an upside of about 25% from Tuesday’s closing price. IOT 1D mountain Samsara, 1 day Block’s theory is supported by constructive end-market demand trends and discussions with industry participants that suggest a differentiated set of offerings. Additionally, Street forecasts have “significant upside” and positive expectations for near-term catalysts. In particular, analysts expect Samsara to highlight its upcoming customer conference and analyst day next week with new product announcements, including the possibility of discussing how the company will leverage generative AI. Block believes Samsara’s new products could boost the company’s growth in the long term. “More recent competitors lack the comprehensive feature set/platform breadth that Samsara (which offers a full product suite across other areas, including telematics, equipment and site monitoring, and driver workflow apps) offers,” he wrote. “They also have smaller R&D budgets and installed bases for data collection and AI model improvements,” Block added. “Because of this, we expect Samsara to remain at the forefront of the video-based safety software market.”
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