5D·

An exciting contender for the second wave of AI? Depot 2036

Good morning, everyone,

Our Japan expert @PikaPika0105 brought a company to my attention last week that is very interesting for the Second Wave .

I look forward to hearing your thoughts in the comments.

$3993 (+2,93%)

PKSHA Technology—an exciting candidate for the second wave of AI?

PKSHA Technology could be a good fit for my investment strategy “Portfolio 2036 – The Second AI Wave” because the company not only develops AI but is increasingly generating revenue by helping businesses integrate AI into their daily workflows.

Originale Unternehmenspräsentation vom 13. August 2026

🚀 Why PKSHA Is Exciting

1. From AI Investments to Monetization

PKSHA offers AI solutions for businesses, such as for customer communication, contact centers, and the automation of work processes. This allows the company to benefit from the next stage of development: Companies no longer just want to test AI—they want to use it to reduce costs and increase their productivity.

2. Recurring Revenue from AI Software

The AI SaaS business is growing steadily. In the third quarter of fiscal year 2026, annual recurring revenue (ARR) reached approximately 11.1 billion yen (+32%). The number of customers rose to approximately 4,900 companies.

3. Proprietary Data Creates Competitive Advantages

According to the presentation, more than 7,000 AI agents are already in use at customer sites. Insights from various industries help further develop the solutions and improve their accuracy. This can create a competitive advantage over new providers and in-house AI solutions.

4. Growth with Increasing Profitability

In the third quarter of 2026, PKSHA reported:

Revenue: 28.34 billion yen (+84.1%)
Adjusted EBITDA: 6.00 billion yen (+40.7%)
Operating profit: 4.71 billion yen (+46.3%)

It should be noted that revenue growth is also influenced by changes in the scope of consolidation.

https://contents.xj-storage.jp/xcontents/AS81483/a461f1ce/3a82/4e61/8769/f2813daefcda/20260813155520371s.pdf

🎯 My assessment for the 2036 portfolio

PKSHA could benefit from the second wave of AI because the company bridges the gap between AI technology and its practical business applications.

While companies like Nvidia benefit from AI infrastructure, PKSHA focuses on its productive use within businesses.

I find the following particularly interesting:

AI agents: Automation of tasks and workflows.
AI monetization: Recurring revenue from software and enterprise solutions.
Scalability: Existing AI solutions can be deployed for additional customers.
Japanese AI market: Potential driven by the increasing digitization of businesses.

The key question for us investors: Can PKSHA expand its market position and translate revenue growth into rising profits and cash flows over the long term?

For me, that would be the most important point in further analysis. The stock’s valuation must also align with expected growth.

My conclusion: PKSHA is an interesting candidate for the second wave of AI—not so much as an AI infrastructure stock, but as a provider of AI applications that are expected to be economically viable.

PKSHA Holdings is a Japanese software group and a provider of artificial intelligence-based software with a focus on AI research and solutions as well as AI software-as-a-service. The company, listed on the Tokyo Stock Exchange (3993), positions itself as a specialized Japanese software group with a key market position in AI software through its proprietary AI technology.

Artificial Intelligence Software as a Service is the segment with the highest revenue and encompasses the core Japanese software business, which includes AI software (cloud-based software powered by artificial intelligence, such as for chatbots, the automation of customerservice, and natural language processing—which PKSHA Holdings primarily offers to Japanese companies on a subscription basis, generating recurring revenue and benefiting from the AI trend) for Japanese companies, with its recurring revenue model establishing a key position in the Japanese AI software market. Artificial Intelligence Research & Solution focuses on developing customized AI solutions and AI algorithms on behalf of companies.

Results depend on trends in the Japanese software and AI market (with the adoption of artificial intelligence, corporate digitalization, growth in the subscriber base, and automation serving as key drivers) as well as competition from other software providers.

The company is primarily engaged in the algorithmic licensing business. It operates in two business segments. The Cloud Intelligence segment focuses on the sale of algorithm modules and the algorithm software BEDORE and CELLOR in the field of intelligent processing in the digital space. The Mobility & MaaS segment focuses on the sale of algorithm modules related to image/video analysis and the sale of the Hrus algorithm software in the field of intelligent management of the physical environment for smart cities. The algorithm modules include text comprehension modules, dialogue modules, image/video analysis modules, recommendation modules, prediction modules, anomaly detection modules, and reinforcement learning modules.

Number of employees: 1,001

PowerPoint プレゼンテーション

KI-Lösung TOP

Solutions by Industry

Solutions by Function

Growth Outlook

The revenue forecast for 2026 is particularly striking. At just under 75% growth, it is exceptionally high. After that, growth is expected to normalize to around 16% annually.

The key point: PKSHA is expected not only to increase revenue but also to further expand its operating profit. This generally points to a growing AI software business. However, it is important to examine to what extent the exceptional growth in 2026 is attributable to organic growth or changes in the scope of consolidation.

My assessment:

2025: The negative free cash flow is a warning sign whose causes should be examined more closely.
2026: The forecast anticipates a return to positive free cash flow.
2027: Expected cash flow will increase significantly. This would be an important step toward better internal financing.
2028: Free cash flow is expected to continue growing, though at a slower pace than in the previous year.

For an AI company, free cash flow is particularly important: revenue growth alone is not enough if the additional business activity requires sustained high investments or high liquidity needs.

What do the margins reveal?

This is a key point in the analysis:

Revenue is growing significantly faster than projected profitability.

The EBITDA margin is expected to fall from 25% in 2025 to around 20% in 2028. The EBIT margin, on the other hand, is expected to stabilize at around 15.6–15.8%.

This isn’t necessarily a negative. PKSHA could invest in new business areas, expand its workforce, or grow the business through acquisitions. The key question is whether these measures will generate additional revenue in the future.

It would be positive if the company were to increase its free cash flow over the long term without having to deploy more and more capital to do so.

5. My Conclusion for the 2036 Portfolio

PKSHA Technology is an interesting company in light of the thesis that artificial intelligence is increasingly being integrated into specific software products and automation solutions.

I like three aspects of the forecasts:

Scalable growth: Revenue is expected to rise to more than 51 billion JPY by 2028.

Operating profitability: EBIT is expected to grow from 3.9 billion JPY in 2025 to approximately 8.1 billion JPY in 2028.

Improved cash flow: A significant recovery is expected following the negative free cash flow in 2025.

For me, the two biggest challenges are declining margins and the sustainability of growth following the exceptional forecast year of 2026.

My verdict: PKSHA is an interesting AI software candidate for the Depot 2036 watchlist. Whether the stock is also an attractive investment, however, depends largely on its valuation and the actual development of free cash flow.

Brief Overview

FC Yield: The forecast improves from −0.85% to 3.72%. This points to an expected improvement in cash flow generation.
P/E Ratio: Declines to 24.8x by 2028. This means the stock is more attractively valued based on projected earnings.
P/B ratio: Decreases to 2.64x.
PEG: According to MarketScreener, it ranges between 1.4x and 1.6x.
Dividend: According to forecasts, it will rise from 10 to 16 JPY per share, but remains low in terms of yield.

My conclusion: The rising free cash flow yield, coupled with a falling P/E ratio, is particularly interesting. The key question remains whether PKSHA will actually meet its earnings and cash flow forecasts.

Here is an important addition from @PikaPika0105

$3993 (+2,93%)

October 16, 2026, 7:02:50 PM •

Lang & Schwarz (EUR)

20.20 EUR

21 Comentários

PikaPika0105@PikaPika0105

There are a few more important points to highlight. PKSHA is the market leader and profitable. Its customers are seeing real productivity gains, which is reflected in a high NRR. Its solutions are mostly based on SLMs or customized open-source models that consume very little energy. They are therefore clearly superior to Claude or ChatGPT in the enterprise segment.

It’s also important to highlight the flywheel effect of the three business segments. In the Solutions segment, companies can commission their own AI algorithms. PKSHA is then paid to develop these algorithms but retains all rights to them afterward. Subsequently, they convert the products that have proven successful into generalized SaaS products and sell them to other companies as well. In effect, their customers pay for their R&D costs.

About half of the recent high growth rate of 80%+ was organic. In addition, the forecast for this year is very conservative and has already been largely achieved, which is why an upward revision is very likely. A dividend will be paid out for the first time this year.

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Tenbagger-Capital@Tenbagger-Capital

@PikaPika0105 Thank you, my dear. I hope you enjoyed the performance.

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Chris@Multibagger

@PikaPika0105 I've been wanting to get in ever since your presentation, but the spread here in Germany isn't great. And I can't trade directly in Tokyo. It isn't traded in the U.S.—at least, there's no way to do so through Flatex.

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PikaPika0105@PikaPika0105

@Multibagger It's best to check at different times of day, since it's always changing!! Sometimes you'll find something trading 1–2% above the ask price, and sometimes closer to 3–5%. But if you believe in the long-term story, it might not matter that much to you :)

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Felix@Shareholder

Thank you so much for the recommendation. I'm adding it to my watchlist. :)

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Jan@Barrd

That sounds really exciting!! Thank you so, so much! I think I'll have to set aside a few coins for you soon! 😁🤝

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Mr. K@TechNav

At a price of 12€, a purchase would become interesting

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Tenbagger-Capital@Tenbagger-Capital

@TechNav Absolut

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Chris@Multibagger

@TechNav How did you come up with that 12€ figure? I'd also find 100$ at $GOOGL interesting, but I don't really believe they'll go there.

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Mr. K@TechNav

@Multibagger EPS is currently around 0.47 EUR. Let’s assume a 12% annual increase (I’m being generous here) for the next 10 years, so they’ll have a terminal EPS of 1.48 EUR per share. If you multiply that by an estimated P/E ratio of 25 (and that’s still bullish/expensive), you get a future share price of 37 EUR. That’s it. I’d gladly buy today for 12 EUR to sell in 10 years for 37 EUR, but not for the 20 EUR they’re asking for today...

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PikaPika0105@PikaPika0105

@TechNav This forecast has little to do with reality. Growth rates are significantly higher, and share buybacks are not factored in either. Earnings are expected to reach around €500 million or more in 10–14 years. Taking into account the yen’s appreciation, a share price of €300 or more would be expected.

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Mr. K@TechNav

@PikaPika0105 High expectations have little to do with reality. I'm a pragmatist. Do you know how much money they'd have to make in 10 years to justify a price of €300 per share? Good luck achieving that with a ROE of 7.7% and a profit margin of 7.5% 😂

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PikaPika0105@PikaPika0105

@TechNav I always find it funny when people who haven’t given the subject a second thought, have no idea about the market, and have only looked at a table of old numbers (without understanding the context), try to explain to you what’s realistic or pragmatic. I know how much money they’d have to make at €300 per share—I just wrote that, after all. That €300 figure is actually on the low side. Take a closer look at the company first before jumping to conclusions.

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Mr. K@TechNav

@PikaPika0105 I also find it funny when people think a company is about anything other than facts and figures…
You can estimate, hope, and speculate all you want, but in the end, you’re just a kindergarten investor—just as clueless as the real investors who are waiting to see what numbers the company squeezes out every quarter.

You’re just living in your own fantasy world and have only seen the market go up in recent years… You’ve still got a lot to learn about the stock market, little guy. You’re still Pikachu Level 3… or something like that 😂😂😂

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PikaPika0105@PikaPika0105

@TechNav Facts and figures—that’s correct. That’s precisely why it’s questionable to look only at the numbers if you don’t know the facts. That was my issue with your somewhat arbitrary forecast. How the respective markets and other macroeconomic factors develop doesn’t really have anything to do with a “fantasy world,” either. The fact that you like to portray yourself as a more experienced investor and dismiss other opinions as “kindergarten stuff” is a bit pathetic. Not knowing anything about the company or the market isn’t a crime, but you should at least admit it.

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Mr. K@TechNav

@PikaPika0105 It's pathetic that you claim someone has absolutely no clue about the market just because they don't believe a company with margins like that can go up 10X in 10 years. I'm sorry, but to me, that's just wishful thinking and kindergarten-level investing. By “facts,” I simply meant today’s earnings, EPS, etc. Anyway, everyone trades based on their own judgment. Feel free to look at my forecasts and even criticize them if you like, but please don’t say “you have no clue.” And if you don’t like it when someone claims you’re living in a fantasy world, please don’t start saying that other people’s opinions have nothing to do with reality.

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PikaPika0105@PikaPika0105

@TechNav I’m not talking about the market in general, but about this specific market and this specific company. After all, you were the one who first said that my statements have nothing to do with reality. Then you should be able to back that up, instead of just saying that something like that simply isn’t possible. And I also think it’s a weak argument to cite the current margin as your only point, without knowing what’s currently influencing it or how it’s trending. You could have asked the people who’ve looked into this why they think that way, but instead you decided that everything else is just fantasy, wishful thinking, and child’s play. To me, that’s simply a questionable and overly self-righteous approach.

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Ver todas as 2 restantes respostas

Chris@Multibagger

Which stocks in your portfolio do you see as having the most promise for the second wave?

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Tenbagger-Capital@Tenbagger-Capital

@Multibagger For the second wave, I'm keeping the following in my portfolio: $GFT, $MSFT, $SIE, $INOD, $ALLIX, and $EXLS. But I'll probably swap out a few of them.

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