What Happened?
Shares of human capital management provider Alight (NYSE: ALIT) jumped 3.8% in the morning session after the company announced the addition of Sword Health, an AI-powered healthcare platform, to its Alight Partner Network.
This move integrated Sword Health's musculoskeletal and mental health care solutions into Alight's Worklife® platform, a service hub for employee benefits. The partnership aimed to provide Alight's corporate clients with significant cost savings while improving their employees' well-being. Sword Health's platform offered clinical-grade care for conditions like chronic pain and women's pelvic health issues. The deal appeared promising for employers, as Sword's solutions previously delivered over $1 billion in healthcare savings, with clients achieving an average return on investment between 2.7 and 3.7 times within just 12 months.
After the initial pop the shares cooled down to $3.51, up 2.3% from previous close.
Is now the time to buy Alight? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Alight’s shares are somewhat volatile and have had 13 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 6 days ago when the stock gained 4.5% on the news that the Consumer Price Index (CPI) report bolstered expectations for a Federal Reserve interest rate cut despite showing persistent inflation.
The August CPI data, a key measure of inflation, showed prices rose 2.9% annually, slightly more than economists expected. While inflation remains above the Federal Reserve's 2% target, investors were focusing on other signs of a cooling economy, particularly a weakening labor market. As a result, the market widely anticipated that the Fed would cut interest rates at its September meeting to support the economy. Investors priced in multiple rate cuts by year-end, which boosted market sentiment and sent Treasury yields lower.
Alight is down 48% since the beginning of the year, and at $3.51 per share, it is trading 58.5% below its 52-week high of $8.46 from November 2024. Investors who bought $1,000 worth of Alight’s shares at the IPO in July 2021 would now be looking at an investment worth $388.53.
Today’s young investors won’t have read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next.
