Names like Nvidia (NVDA) and Palantir Technologies (PLTR) may come to mind when investors think of artificial intelligence leaders. But Merck (MRK) partner Veeva Systems (VEEV) has also emerged as a top AI play in the medical software space. Now Veeva stock continues to tease a new buy zone as it earns a spot on the Investor's Business Daily Breakout Stocks Index.
Veeva also joins Nvidia and Palantir on the IBD 50, IBD Big Cap 20, and the latest list of new buys by the best mutual funds. A new deal with Merck to further streamline AI in therapeutics could also give shares of Veeva an extra kick.
Based in Pleasanton, Calif., Veeva is a global leader in cloud software for the life sciences industry. It serves over 1,000 customers, ranging from the world's largest biopharmaceutical companies to emerging biotechs.
On July 21, Merck said it had committed to Veeva Vault CRM. Veeva's platform will support a significant push by Merck across a diverse set of new therapeutic areas. Linked with Veeva AI, Vault CRM focuses on making AI simple, secure and compliant for life science organizations.
The Vault CRM platform addresses the unique regional and country-specific business and compliance requirements of the pharmaceuticals and life sciences industries.
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While Nvidia and Palantir both sport the highest-possible 99 Composite Rating, Veeva ranks just behind with a 98.
On the latest monthly report on new buys by top funds, leading money managers scooped up more than $991 million worth of Veeva stock. While impressive, Nvidia, in particular, and Palantir dwarfed that number with capital inflows of $24.19 billion and $2.45 billion, respectively.
Additionally, an impressive 149 funds with an A+ rating from IBD own shares of Veeva stock.
Strong and steady earnings growth drives that demand. Over the last eight quarters, Veeva has posted sales growth ranging from 10% to 24%. Earnings growth came in between 19% and 65% during the same period.
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As fellow AI stocks to watch Nvidia and Palantir trade around record highs, Veeva stock has climbed back to within striking of the all-time high it hit back in August of 2021.
Veeva has built an early-stage flat base with a 291.69 buy point. The stock initially cleared that entry last week, but retreated below it on Tuesday. The stock edged lower again Wednesday, but found support at its 21-day exponential moving average, ending the session 2% shy of a breakout.
On Thursday, Veeva retreated once more but again held support at its 21-day line. Shares closed 3% shy of the buy zone.
In a sign of rising technical strength, the 21-day line moved back above the 50-day line in May and continues to rise. The 50-day moving average also continues to climb.
The IBD Breakout Opportunities ETF (BOUT) from Innovator Capital Management tracks the IBD Breakout Stocks Index. As with other index ETFs, this fund allows you to invest in the entire index in addition to, or rather than, buying individual stocks. Learn more here about the ETF and Innovator.
Follow Matthew Galgani on X (formerly Twitter) at @IBD_MGalgani.
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