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Let’s be clear about one factor. Schrödinger (SDGR) isn’t an AI inventory. That’s what they emphatically informed us the final time we implied such a factor, and it’s admirable in an setting the place each single firm is plastering “generative AI” throughout their investor decks in hopes of attracting extra {dollars}. What Schrödinger does is make the most of software program simulations to assist drug builders higher predict which novel molecules will efficiently move the FDA drug approval gauntlet. Their enterprise mannequin captures worth from software program licensing annual contracts (software program), and downstream royalties and milestone funds (drug discovery). After displaying robust double-digit development for the previous 5 years, Schrödinger might now see destructive development based mostly on the center of their 2024 steerage.
And that coincides completely with our annual check-in with one of many 37 disruptive tech shares we’re at the moment holding.
Software program Progress Stalls
The drop in income development is a priority, particularly contemplating that in every single place we glance software program is reworking how corporations do enterprise. In SDGR’s year-end earnings name, the primary analyst out of the gate nailed it with a superb query. How ought to buyers take into consideration SDGR’s software program steerage of 6% to 13% given a) the corporate’s previous robust income development and b) the current industry-wide AI momentum?
These questions are essential as a result of we are able to’t reply them trying in from the skin. Whereas dru
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