Enthusiasm over the prospects for artificial intelligence (AI) continues to be a significant driver for many stocks, including several of the so-called Magnificent Seven. The question for investors who have been cautious about what might have been a fad, or those who are simply late to the party, is whether it is too late now to enter the fray. Have all the profits in AI stocks been made?

There may still be opportunities to be found. One example is Spectral AI Inc. (NASDAQ: MDAI), a Dallas-based medical diagnostics company that went public in April of 2021. Its share price tumbled last year, but it is projected to more than double in the coming year. So what’s up here? Let’s have a look.

A Healthy Recovery for Spectral AI?

One-Year Price Change	Target Price	Est. One-Year Gain
−83.0%	$4.00	132.6%

The company’s aim is to provide medical diagnostics that allow for faster and accurate treatment decisions in wound care with applications involving patients with burns and diabetic foot ulcers. Spectral AI’s products include DeepView, which is a predictive diagnostic device that offers clinicians an objective and immediate assessment of a wound’s healing potential prior to treatment or other medical intervention.

The company’s market cap is about $32 million. That is less than those of competitors such as Butterfly Network Inc. (NYSE: BFLY) and Medtronic PLC (NYSE: MDT).

Spectral AI just announced the formation of a wholly-owned subsidiary dedicated to advancing intellectual property (IP) relevant to the broader AI ecosystem, with a specific emphasis on health care.

Last month, the board of directors selected Chief Financial Officer Peter Carlson to replace outgoing Chief Executive Officer Wensheng Fan, who transitioned to chief innovation strategist and senior advisor to the CEO. The company also reaffirmed its forecast revenue growth for 2024.

The stock got a boost back in October when the DeepView wound imaging system received an approval from U.K. regulators. Shares were still off from the post-IPO high near $19 seen in early September. The stock tumbled to near $4 a share shortly thereafter, perhaps on a combination of some profit-taking and overall concerns by some analysts and investors that an AI bubble might have formed.

Shares are down about 30% year to date and more than 82% since the initial public offering. Where do they go from here?

Who Is Rooting for This AI Stock?

Only one analyst covers the stock, initiating coverage in January with a Buy rating. BTIG analyst Ryan Zimmerman sees the stock more than doubling in the coming 12 months to $4 per share, noting that the advanced wound care market is large and underpenetrated. Moreover, the analyst expects Spectral AI’s licensing model to drive recurring revenue at high margins. That could make it a stable growth company.

Will the stock recover and soar this year? At least one analyst believes it is headed in the right direction.

 

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