Investors have become increasingly selective while investing in artificial intelligence (AI)-powered stocks. Instead of companies with just an AI strategy, they are putting capital into businesses with monetizable AI technologies.
One such lesser-known AI player is Veritone (VERI 5.54%), a company focused on transforming massive amounts of unstructured audio, video, image, and text data into high-quality, searchable, model-ready data that is machine-readable and can be monetized.
Image source: Getty Images.
The business is powered by its proprietary AI operating system, aiWARE, which tokenizes (converts into machine-readable units) video and audio, the fastest-growing segment of unstructured data, at an unprecedented scale. These tokenized data sets are used to power the company's own applications, as well as client applications, across enterprise and public sector use cases.
On top of this core platform, Veritone's Data Refinery (VDR) converts raw, unstructured data across media formats into high-quality, tokenized datasets, which can be used to train and fine-tune advanced AI models.
D. Boral Capital analyst Jason Kolbert has recognized the company's growth potential and has set a target price of $23 for the stock. This implies an upside potential of over 337% (as of Dec. 16).
Here's why there remains a fair chance of the company hitting this seemingly outlandish target in 2026.
Robust deal flow
Unlike many high-growth AI companies with technologies in the pilot stage, Veritone's aiWARE platform is already tokenizing unstructured data for use across enterprises and government applications.
In its fiscal 2025's third quarter (ended Sept. 30), the company signed 27 commercial agreements, including Walt Disney's ESPN, the National Collegiate Athletic Association (NCAA), and Newsmax - and it also expanded its relationship with Paramount Skydance's CBS. Veritone is helping these media organizations unlock value and monetize their massive data archives.
NASDAQ: VERI
Key Data Points
Veritone is also seeing robust public-sector adoption of its technology. The company closed 82 contracts across federal, state, and local agencies, including 30 new agencies in the third quarter. It's deploying its solutions for law enforcement, defense, and civil agencies.
Public sector AI deployments can be more durable, as agencies tend to favor trusted vendors with proven security, compliance, and operational reliability. Subsequently, the company exited the third quarter with a public sector pipeline worth $218 million, nearly double the amount from the same quarter in the prior year.
Veritone has entered into a partnership with another computing specialist, Armada , to develop an edge-to-enterprise data fabric system for processing high volumes of multimodal data from remote locations closer to where it is generated. This deal can expand the company's addressable market beyond traditional cloud-based deployments.
Veritone Data Refinery
While aiWARE platform provides a secure and scalable foundation, VDR is increasingly being considered the company's prominent growth catalyst, positioning the company to benefit significantly from the fast-growing AI training data market. Grand View Research estimates the global AI training dataset market will grow from $3.19 billion in 2025 to $16.32 billion by 2033. AI model developers are increasingly opting for high-quality, proprietary, and multimodal datasets with clear usage rights over scraped web data.
The company secured contracts with multiple new VDR customers, including several hyperscalers, in the third quarter. The company's VDR pipeline and bookings have grown 100% quarter over quarter to over $40 million in the third quarter. Management, however, claimed that this pipeline includes only near-term opportunities, implying that the long-term pipeline spanning additional industries, geographies, and multiyear AI training programs could be much larger.
Financial performance
Veritone is also seeing improvement in its financial performance. In the third quarter, revenue rose 32% year over year to $29.1 million, while non-GAAP (generally accepted accounting principles) net loss declined 48% year over year to $5.8 million.
Management is guiding for revenue between $109 million and $115 million, and a non-GAAP net loss between $31.6 million to $26 million, for fiscal 2025. Management's focus on high-growth AI software products and cost savings has been driving its performance in the recent quarter.
Veritone has also announced plans to de-lever its balance sheet by paying off 100% of its term debt and paying 50% of its outstanding convertible debt. Subsequently, the company will reduce its annual debt service costs by $14 million to approximately $800,000. Post this debt payoff, the company estimates its total cash balance to be $34 million, while the remaining debt will fall from $123.1 million to $45 million.
Valuation
Veritone shares trade at 4.5 times sales, a multiple that continues to reflect the historical debt overhang on its balance sheet and market concerns around its lack of profitability. However, that situation may soon improve, especially after management reduces leverage and improves financial flexibility. As balance sheet risks reduce and high-growth AI products increasingly dominate the revenue mix, the market can start valuing Veritone more in line with other AI-driven data and software platforms, such as Snowflake, MongoDB, or even Palantir Technologies .
While D. Boral Capital's $23 target price is clearly aggressive, it is not based just on near-term financial and operational performance. Instead, it assumes continued scaling of the VDR business, improving profitability as high-margin software revenues expand, and a meaningful expansion in valuation multiples. The research firm is also increasingly confident of Veritone's execution capabilities. If the company achieves these goals, there remains a good possibility that the stock will hit the target price by 2026.
Investors, however, should not ignore the speculative nature of this investment, considering the company remains unprofitable, has high cash burn, and operates in a highly competitive landscape. Hence, only long-term investors who can tolerate near-term volatility can consider picking a small stake in this stock now.
