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Kelly Services Stock (NASDAQ:KELYA): A Contrarian, Anti-AI Investment
Stock Analysis & Ideas

Kelly Services Stock (NASDAQ:KELYA): A Contrarian, Anti-AI Investment

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Although the rise of OpenAI’s ChatGPT sparked a craze for artificial-intelligence-related investment opportunities, staffing agency Kelly Services represents the other side of the narrative. Basically, KELYA stock is an anti-AI investment, and it might succeed in this contrarian niche.

Thanks to the dramatic rise of OpenAI’s artificial-intelligence-powered chatbot ChatGPT, investors eagerly target opportunities in this next wave of digitalization. However, staffing agency Kelly Services (NASDAQ:KELYA) offers upside potential but through the opposite side of the fence. Basically, it’s an anti-AI investment, providing a critical hedge to the machine learning movement. Therefore, I am bullish on KELYA stock.

Why Society Needs Anti-AI Heroes

Underlying innovations in AI sit the ever-rising fear that machines could take over human civilization. Hollywood science-fiction franchises such as The Terminator series run wild with this anxiety. To be sure, it’s probably unlikely that humanity will ever face off with self-intelligent and self-aware robotic killing machines. However, they could take over our jobs.

Recently, freelancer networking platform Fiverr (NYSE:FVRR) suffered a sharp drop due to the competitive headwind that ChatGPT poses. As a generative AI platform, ChatGPT can formulate its own content. Theoretically, then, companies that need to bolster their digital content space no longer need to hire writers. Instead, they could turn to AI protocols, saving gobs of money and reaping the rewards.

However, it’s not just writers and other creatives that risk disruption from the rise of machines. Even functions tied to science, technology, engineering, and math (STEM) education face risks if they’re tied to rote mechanisms. For example, companies that need help programming basic software functions can turn to ChatGPT.

In addition, jobs like bookkeepers may face a significant risk of obsolescence from AI innovations. After all, human math and machine math are the same thing, and to be blunt, computers can perform more calculations quicker than the brightest individual can hope to match.

Thus, society needs anti-AI heroes. Left unchecked, several industries may face disruption, sparking potential societal and economic turmoil. Fortunately, that’s where KELYA stock comes into play.

KELYA Stock Fills the Employment Gap

A primary factor that keeps KELYA stock relevant is the underlying enterprise’s broad focus. Unlike other staffing agencies that target exclusively finance or technology jobs, Kelly broadens its horizons to include workforce solutions in the industrial sector, which involve warehousing and manufacturing operations. Also, Kelly connects professional educators to roles in academia. Neither industry align well with AI protocols.

True, warehousing and manufacturing functionalities often involve smart machines; otherwise, as enterprises scale up, the intense volume of product orders would overwhelm mere humans. However, both software and hardware eventually malfunction or outright fail. Therefore, companies still need humans to address and fix any problems that may arise.

As for the educational front, several editorials and research organizations have noted that remote learning has been a disaster for many students. Therefore, if human teaching filtered through the lens of machinery yields poor results, replacing the human element altogether with computers would probably spark catastrophes.

More importantly, with Kelly Services facilitating connections for jobs that require hands-on engagement, it pushes back against the notion that the white-collar route represents the only road to financial success. As many organizations pointed out, society suffers from a dearth of individuals willing to work blue-collar jobs.

In addition, NPR recently sounded the warning that the U.S. does not have enough farmers. That’s definitely one problem that AI can’t solve without willing humans. With Kelly providing opportunities across numerous industries, KELYA stock provides daring contrarianism against the AI wave.

The Financials Also Support the Optimistic View

Several days ago, Kelly Services revealed its results for the first quarter of 2023. For the bulls, the data was quite encouraging. First, the staffing services specialist posted adjusted earnings per share of 40 cents. While this was lower than the year-ago quarter, which saw adjusted EPS of 46 cents, it beat Wall Street’s consensus target of 30 cents per share.

On the top line, Kelly generated revenue of $1.27 billion, beating analysts’ consensus target by 2.68%. Nonetheless, in Q1 2022, the company rang up sales of $1.3 billion.

On an annual basis, Kelly has been steadily recovering from the COVID-19 impact, when revenue tumbled to $4.52 billion in 2020. In 2019, the company generated sales of $5.36 billion; now, revenue on a trailing-12-months basis sits at $4.94 billion.

Is KELYA Stock a Buy, According to Analysts?

Turning to Wall Street, KELYA stock has a Moderate Buy consensus rating based on two Buys, zero Holds, and zero Sell ratings. The average KELYA stock price target is $24.00, implying 28.9% upside potential.

The Takeaway: KELYA Stock Provides Reassurances to Humans

Although AI protocols understandably sparked intense interest among investors, they also have the uncomfortable potential of disrupting or perhaps even outright replacing certain job functions. In that sense, KELYA stock represents an anti-AI investment. With the underlying company providing opportunities across the entire work spectrum, Kelly pushes back against the machines.

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