Cerillion Stock And 2 AI Software Shares With Strong Profit Margins

The AI Stocks screener focuses on companies at the heart of the ChatGPT and artificial intelligence shift, from semiconductors and cloud infrastructure to software and large language models. With central banks watching inflation, energy prices moving on geopolitics, and earnings season in full focus, investors are paying close attention to businesses that support automation, data processing and digital transformation. This screener aims to filter that broad universe into a more targeted list. In this article, you will see three of the strongest candidates from the AI Stocks screener, with a clear breakdown of what each business does and what to watch next.

Cerillion (AIM:CER)

Overview: Cerillion is a London based software company that builds billing, charging and customer management systems for telecom operators and subscription businesses worldwide, helping them run complex services such as quad play bundles, smart city connectivity and digital customer experiences on one platform.

Operations: Cerillion generates most of its revenue from Software at £22.6m, followed by Services at £17.8m and Other income of £2.0m.

Market Cap: £310.2m

Cerillion sits at the crossroads of AI driven telecom automation, with products like its Enterprise Product Catalogue and Business Insights bringing AI into pricing, analytics and service orchestration. The company has reported profitability metrics such as a 32.2% net margin and ROE of 22.6%. Analysts broadly see upside potential and forecast mid teens earnings and revenue growth, yet the latest interim results showed revenue and net income both declining, and non cash earnings plus debt heavy funding add layers of risk. For investors tracking AI infrastructure, a key consideration is whether Cerillion’s margins, dividend growth and agentic AI initiatives at events like DTW Ignite balance out concerns around earnings quality and funding structure.

Cerillion’s mix of strong margins, AI driven telecom software and debt funded growth can look compelling, but the real story sits in how these pieces fit together in the 3 key rewards and 1 important major warning sign

Bytes Technology Group (LSE:BYIT)

Overview: Bytes Technology Group is a UK based IT reseller and services company that supplies software, hardware, cloud and AI solutions, plus cyber security and consulting support, to organisations across the United Kingdom, Europe and other international markets.

Operations: Bytes Technology Group generates virtually all of its £220.6m revenue from its IT Solutions Provider segment, with £211.9m from the United Kingdom and smaller contributions from Europe and the rest of the world.

Market Cap: £968.3m

Investors watching AI and cloud adoption may find Bytes Technology Group interesting because it already sits inside many customers’ core IT budgets, selling software, security and cloud subscriptions while adding higher margin services like cyber security and AI focused solutions. The company combines strong profitability, with a 23.3% net margin and very high 63.2% ROE, with a P/E that is below many software peers, although earnings recently declined and guidance points to flat operating profit while it absorbs higher tech costs. Reliance on lower margin public sector contracts, shifting Microsoft rebate structures and an unstable dividend record all add risk. This makes the detailed balance of growth opportunities, valuation and funding structure worth a closer look for long term investors.

Bytes Technology Group’s high 63.2% ROE and solid net margin could be masking a far more nuanced story around sustainability, valuation and contract risk, and the real tension shows up in the analysis report for Bytes Technology Group

AdvancedAdvT (AIM:ADVT)

Overview: AdvancedAdvT is a London based software group that provides business, workforce and healthcare compliance platforms, including AI driven tools for healthcare intelligence, process automation, low code digital apps and cloud based workforce management for customers across the UK, Europe and North America.

Operations: AdvancedAdvT generates all of its £53.4m revenue from its Internet Software & Services segment in the United Kingdom.

Market Cap: £224.4m

AdvancedAdvT gives you exposure to AI powered workflow and healthcare compliance software. Analysts expect its earnings to grow 32.04% per year and its share price currently sits about 20% below one estimate of fair value, even though the current P/E is well above many European software peers. At the same time, net margin has slipped to 8.6% from 25.1%, a £5.6m one off loss is weighing on recent results and returns on equity are currently low at around 3%, all funded entirely by external liabilities. The key issue for investors is whether that mix of high forecast earnings growth, modest revenue growth and a richer valuation can be justified by how AdvancedAdvT executes from here.

AdvancedAdvT’s high forecast earnings growth, combined with modest revenue progress and a richer P/E, raises important questions about what investors might be missing. The full picture only really comes into focus in the analyst forecasts for AdvancedAdvT

The three stocks covered so far are just a starting point. The full Artificial Intelligence/ AI Stocks screener surfaces 15 more companies connected to semiconductors, cloud, software and large language models, each with its own compelling AI narrative. Use Simply Wall St to identify, filter and analyze the specific catalysts and storylines that matter to you so you can focus on the ideas you find most compelling in this AI shift.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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