In a significant move, Opera Limited’s built-in browser AI, Aria, is now open to all desktop and gaming users, as well as Opera for Android beta users. This shift eliminates the need for an account login, making Aria’s cutting-edge features, such as Image Generation, Image Understanding, and Page Context mode, more accessible to a broader audience.
Opera has further expanded Aria’s reach to Android and iOS platforms, continuing its mission to elevate daily browsing experiences with advanced AI capabilities integrated into its Opera One, Opera GX, and mobile browsers.
Driving Factors Behind OPRA’s Future
The latest development aligns with Opera’s strategic focus on enhancing user accessibility and AI-driven browsing, underscoring its commitment to sustainable technological advancements.
Opera Limited’s Steady Growth Despite Market Trends
Opera Limited (OPRA) has seen its shares rise by 19% year-to-date, although this growth slightly lags behind the broader Computer & Technology sector’s 23.3% and outperforms the Internet – Content sector’s 5% increase. The introduction of Aria AI enhancements has significantly boosted user engagement and monetization, in line with the company’s aim to deliver enhanced AI-driven features.
In the second quarter of 2024, Opera introduced several new products and updates, including Opera One for iOS and the Opera GX gaming browser – a move that has expanded its user base significantly.
Opera GX particularly excelled, attracting 500,000 new users in the second quarter and totaling 30 million monthly active users, a 27% year-over-year increase.
The company’s outlook is further brightened by its robust partnership network, featuring industry giants such as Alphabet’s Google Cloud, Microsoft, and NVIDIA. A recent collaboration with Google Cloud aims to integrate Gemini models into Opera’s Aria browser AI to improve user experiences with advanced image generation and text-to-audio capabilities.
Opera’s introduction of an Arm-optimized browser version has proven speedy on Arm-based Windows systems, leveraging enhanced AI capabilities supported by Microsoft’s App Assure and Qualcomm Technologies.
Moreover, Opera has established a new AI cluster in Keflavik, Iceland, utilizing green energy and NVIDIA’s DGX SuperPOD with H100 Tensor Core GPUs. This deployment promises significantly faster training and inference – four times and 30 times, respectively – bolstering AI capabilities across its browsers and services.
Positive Projections for OPRA in Q3
For the third quarter of 2024, Opera anticipates revenues in the range of $119-$121 million, indicating a 17% year-over-year growth at the midpoint. Analysts set the Zacks Consensus Estimate for third-quarter 2024 revenues at $120.75 million, forecasting a 17.64% increase year over year.
The earnings consensus for the same period stands at 23 cents, unchanged in the last 30 days, projecting a 27.78% year-over-year growth.
Valuation and Investment Outlook
Currently, Opera’s shares appear undervalued, supported by a Value Score of B. The forward 12-month Price/Sales ratio for OPRA is at 3.05X, significantly lower than the industry’s 7.50X.
Backed by a strong product portfolio and partnership network, Opera displays promising potential for product demand. With a Zacks Rank #2 (Buy), investors are encouraged to consider accumulating the stock at its current valuation. Opera’s trajectory is one to monitor closely.