TSS, Inc: A High-Growth AI Stock to Watch in 2024

TSS, Inc. (NASDAQ: TSSI) is a company that specializes in integration technology services, helping businesses set up, run, and maintain their IT systems. They operate in two main areas: Facilities and Systems Integration. They provide a one-stop solution for data centers, network facilities, server rooms, security operations centers, and more. Their services include technology consulting, design and engineering, project management, systems integration, installation, facilities management, and IT procurement.

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Why We Like The Stock

Financial Growth

TSS has shown strong financial performance. In Q1 2024, they reported $15.9 million in revenue, up from $6.6 million in Q1 2023. This significant increase was primarily driven by their procurement services. Although their gross margin dipped to 17% from 26%, they achieved a net income of $15,000, turning around from a net loss of $786,000 the previous year.

Focus on AI and Accelerated Computing

The Systems Integration segment is particularly promising. Revenue in this segment jumped from $4.3 million to $13.7 million, reflecting TSS’s focus on AI and accelerated computing infrastructure. They’re helping enterprises and data centers integrate the latest AI equipment and GPUs, tapping into a rapidly growing market.

New Leadership

TSS recently promoted Todd Marrott to Chief Operating Officer, effective July 1, 2024. Marrott joined TSS in November 2022 as Senior Vice President of Operations. Under his management, the Systems Integration business became profitable again, and production capacity was increased. 

Improved Cash Position

Recently, TSS has improved its cash position, increasing from $11.8 million at the end of 2023 to $14.4 million. This financial stability provides a buffer for future growth and strategic initiatives.

Risks & Considerations

Of course, no investment is without risks. One major concern is TSS’s reliance on a single customer, which accounted for 98% of its revenue in Q1 2024. This concentration risk is something to keep an eye on. Additionally, the competitive and fast-evolving nature of the AI market means TSS needs to continually innovate and invest in R&D to stay ahead.

Sources: Information from this article was sourced from TSS’s official website and press releases.