Amidst roiling market expectations, Zebra Technologies (NASDAQ: ZBRA) delivered a fourth-quarter performance exceeding Wall Street’s tepid forecasts. This gratifying outcome prompted an encouraging surge in the company’s stock price, as investor optimism swelled in response to Zebra’s promising outlook for the upcoming quarters.
However, beyond the scope of its recent financial success lies an even more intriguing narrative. Zebra Technologies is strategically positioning itself to capitalize on the burgeoning artificial intelligence (AI) wave, a move that permeates its entire operational strategy, promising enduring benefits for stakeholders well into 2024 and beyond.
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Zebra’s Mastery of AI
With its roots deeply entrenched in AI, Zebra Technologies has long distinguished itself as a trailblazer in the utilization of machine learning algorithms, empowering its barcode scanners to decipher codes under diverse and challenging conditions. Bolstering this heritage are strategic acquisitions, including the 2021 purchase of the AI-based retail forecasting expert Antuit.ai and the 2022 acquisition of machine vision specialist Matrox.
This proactive approach reflects Zebra’s preternatural foresight, underpinned by its extensive network of clients and partners, and further complemented by its prowess in data analytics. By collaborating with semiconductor behemoth Qualcomm (NASDAQ: QCOM), Zebra has actualized a groundbreaking innovation – operating a large language model (LLM) akin to ChatGPT, entirely on mobile devices, free from reliance on cloud computing resources.
Zebra CEO Bill Burns encapsulated this breakthrough, illustrating its practical implications, articulating, “It’s like having a grizzled industry veteran in your pocket at all times, even on the go in network-impaired locations. Or, imagine needing AI insights on handling power outages with no connectivity at all. A cloud-based LLM would literally leave that unfortunate store manager in the dark.”
Reimagining AI Capabilities
Burns also expressed Zebra’s expansive AI vision, signifying that the company currently oversees around 50 distinct AI projects across its diverse portfolio, enveloping various facets such as machine vision inspection, workforce planning, and demand forecasting. This far-sightedness underscores Zebra’s proactive approach, positioning the company as a pioneering force in integrating advanced AI capabilities directly into its products and services.
For prospective investors, Zebra Technologies presents an opportunity unlike any other – a chance to not just keep pace but leap ahead in innovation. Trading at a modest valuation of 2.8 times sales or 20 times forward earnings estimates, Zebra symbolizes a prudent investment proposition in the realm of cutting-edge retail, distribution networks, and data management. It’s akin to getting in on the ground floor of a compelling AI-assisted evolution.
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Anders Bylund has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Qualcomm and Zebra Technologies. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
