Qualys Maintains Hold Rating Despite Cost Discipline Amid Challenging Demand Environment

Shaul Eyal from TD Cowen maintains a Hold rating on Qualys with a price target of $135. The company is expected to surpass EPS estimates in Q2 2025 due to cost discipline, but growth potential is constrained by factors like budget cuts, tariff uncertainties, and increased competition. Management's efforts to leverage partnerships and optimize new customer acquisition have not yielded significant results, and the company's cloud security solutions lack scale to boost top-line growth.

In a recent report by Zacks Equity Research, five mid-cap AI infrastructure stocks have been recommended for investment. These companies have shown strong performance in the past three months and offer deep discounted values, positioning them for long-term growth. The report highlights the following stocks: UiPath Inc. (PATH), Five9 Inc. (FIVN), C3.ai Inc. (AI), Qualys Inc. (QLYS), and Fastly Inc. (FSLY) [1].

The AI infrastructure space has seen increased demand and investment, with a significant increase in capital expenditure. Four of the "magnificent 7" stocks have committed to spending $325 billion in 2025 on AI-infrastructure development, a 46% year-over-year increase. This investment is expected to transform various sectors over the next five years, including healthcare, energy, and cybersecurity [1].

UiPath Inc. (PATH) is a leading provider of an end-to-end automation platform, offering robotic process automation solutions. The company has embedded AI, ML, and NLP capabilities in its platform, which enhance decision-making and information processing. UiPath has an expected revenue and earnings growth rate of 8.5% and 5.7% for the current year, respectively. The Zacks Consensus Estimate for current-year earnings has improved by 1.8% over the last 30 days [1].

Five9 Inc. (FIVN) provides intelligent cloud software for contact centers, with a focus on AI-driven customer service solutions. The company has seen growth in the adoption of AI tools in its call center services, driven by personalized AI agents. Five9 has an expected revenue and earnings growth rate of 9.6% and 11.7% for the current year, respectively. The Zacks Consensus Estimate for current-year earnings has improved by 0.7% over the last 60 days [1].

C3.ai Inc. (AI) specializes in enterprise AI applications, including predictive maintenance and generative AI tools. The company's growth strategy is focused on aligning with major cloud providers and government institutions. C3.ai has an expected revenue and earnings growth rate of 20.1% and 9.8% for the current year, respectively. The Zacks Consensus Estimate for current-year earnings has improved by 19.6% over the last 60 days [1].

Qualys Inc. (QLYS) benefits from the increasing demand for cloud-based cybersecurity solutions. The company has seen strong growth due to its strategic acquisitions and AI-powered solutions. Qualys has expected revenue and earnings growth rates of 7.3% and 0.7% for the current year, respectively. The Zacks Consensus Estimate for current-year earnings has improved by 7.7% over the last 60 days [1].

Fastly Inc. (FSLY) provides infrastructure software for cloud computing, image optimization, security, and edge computing solutions. The company's AI Accelerator allows developers to optimize LLM generative AI applications more efficiently. Fastly has an expected revenue and earnings growth rate of 8.6% and 25% for 2025, respectively. The Zacks Consensus Estimate for 2025 earnings has improved by 10% over the last 30 days [1].

Shaul Eyal from TD Cowen maintains a Hold rating on Qualys with a price target of $135. While the company is expected to surpass EPS estimates in Q2 2025 due to cost discipline, growth potential is constrained by factors like budget cuts, tariff uncertainties, and increased competition. Management's efforts to leverage partnerships and optimize new customer acquisition have not yielded significant results, and the company's cloud security solutions lack scale to boost top-line growth [2].

In conclusion, these mid-cap AI infrastructure stocks offer promising growth prospects in the long term. However, investors should consider the risks and uncertainties associated with each stock before making investment decisions.

References:
[1] https://finance.yahoo.com/news/zacks-analyst-blog-highlights-uipath-084600263.html
[2] https://seekingalpha.com/news/4466330-copper-futures-jump-2-after-trump-tariff-decision-global-mine-output-seen-rising-25-in-2025