Opera Limited, a Norway-based company known for its desktop and mobile web browsers, is emerging as a formidable player in the tech sector. Here’s why Opera is a stock to watch:
- Impressive Growth Potential: Goldman Sachs recently issued a buy rating and a $16.50 price target, indicating a potential 51% gain over the next 12 months.
- Strong Performance: Shares of Opera have surged over 86% this year, driven by improved profitability, product innovation, and the initiation of a semiannual shareholder dividend program at 40 cents per share.
- Digital Advertising and AI Advancements: Opera is well-positioned to benefit from the growing digital advertising market and advancements in generative AI. The company’s focus on these areas is expected to drive sustained double-digit growth in the coming years.
- Expanding Market and Margin Expansion: Opera’s total addressable market is projected to reach approximately $667 billion by 2026. The company is also poised for steady margin expansion, balancing marketing and headcount costs with a relatively fixed cost base.
- Revenue Growth and AI Integration: Opera is on track to achieve more than 10% compound annual revenue growth by 2028. This growth is fueled by product innovations and AI advancements, including the Opera One browser and the Aria AI chatbot, which leverages OpenAI’s ChatGPT technology.
- Market Share and Competitive Landscape: Opera’s potential to gain market share in key western markets and its positioning in the competitive landscape, especially concerning generative AI, are key factors for its future growth.
Conclusion:
Opera Limited stands out as a promising investment opportunity in the tech sector, with significant upside potential. Its strategic focus on digital advertising, AI integration, and market expansion positions it for substantial growth and profitability.
