Teladoc Health Inc. (TDOC) saw its stock surge 5.11% in intraday trading on Thursday, driven by speculation that the telemedicine company could be a hidden artificial intelligence (AI) opportunity.
The bullish sentiment was fueled by a report from Citron Research, which identified Teladoc as a potential AI play that is being undervalued by the market. While Teladoc's revenue growth has plateaued following the COVID-19 pandemic, the firm highlighted the company's improving profitability and cash flow generation as signs of its ability to leverage technology efficiently.
Citron further suggested that Teladoc's depressed valuation could make it an attractive acquisition target for tech giants like Amazon or healthcare companies like CVS Health. The firm argued that Teladoc's high-margin, cash-flow-positive business could be a desirable asset for these companies as they expand their presence in the healthcare sector. However, the report also acknowledged the skepticism surrounding Teladoc's AI capabilities and its uncertain future.