1 Overlooked Artificial Intelligence (AI) Stock Down 54% to Buy Hand Over Fist, According to Wall Street
作者：Anthony Di Pizio, The Motley Fool October 3, 2025 6 min read
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Managing truckloads of data is one of the biggest challenges for modern businesses.
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Elastic's artificial intelligence-powered software helps businesses make their data more discoverable for their employees and customers.
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Elastic stock is near the cheapest it has ever been, and Wall Street is bullish on its prospects from here.
When it comes to artificial intelligence (AI) stocks, the likes of Nvidia, Palantir Technologies, and Microsoft typically get most of the attention from investors. But this industry is expanding rapidly, and so are the potential opportunities.
Elastic N.V. (NYSE: ESTC) developed a portfolio of AI software products to help businesses turn their data into useful tools for their employees and customers. Demand is climbing fast, which recently drove an acceleration in the company's revenue growth.
Elastic stock remains 54% below its 2021 record high, when a frenzy in the tech sector drove its valuation to an unsustainable level. However, the majority of the analysts tracked by The Wall Street Journal have given the stock a buy rating, with none recommending selling, so there could be an opportunity here for investors. Let's dive in.
According to the International Data Corporation, around 480 exabytes of new data are created every single day. To put things in perspective, a single exabyte is one million terabytes, so it's no surprise businesses are struggling to manage this enormous pile of information, let alone extract value from it.
Elastic created an innovative tool called Elasticsearch, which sits on top of an organization's internal data. It allows employees to run simple search queries using natural language to find information, as opposed to manually digging through thousands of different documents. For example, if an employee wants to know the organization's policy on hybrid work, but can't locate the specific document, Elasticsearch can pull the information they need instantly.
Elastic created a new platform called Search AI to make the user experience even more powerful. It enables businesses to build generative AI into Elasticsearch, which leads to higher-quality responses even if queries contain fewer words or less contextual information. Plus, it can reduce the response time from minutes to milliseconds.
Search AI can also bring a unique search experience to sales channels, transforming the way customers buy products.
Let's say a customer wants to build a retaining wall in their backyard; in the past, they would use a tool like Alphabet's Google Search to figure out what products they need. But through a website powered by Search AI, the customer can enter a query like "what tools and materials do I need to build a 100-foot-long, 4-foot-high brick retaining wall?" The website will then return a curated list of products they can buy with a couple of clicks.
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