Will I3 Verticals (IIIV) Benefit From AI?

In its Q2 2026 capitalist letter, Heartland Value Fund highlighted I3 Verticals, Inc. (NASDAQ:IIIV). I3 Verticals, Inc. (NASDAQ:IIIV) is an endeavor bundle and services solutions supplier to nationalist assemblage entities. On July 14, 2026, I3 Verticals, Inc. (NASDAQ:IIIV) closed astatine $20.87 per share. One-month instrumentality of I3 Verticals, Inc. (NASDAQ:IIIV) was 4.56%, and its shares mislaid 27.51% implicit the past 52 weeks. I3 Verticals, Inc. (NASDAQ:IIIV) has a marketplace capitalization of $582.93 million.

Heartland Value Fund stated the pursuing regarding I3 Verticals, Inc. (NASDAQ:IIIV) successful its Q2 2026 capitalist update:

"While the herd mentality initially drove up PLAB shares connected AI hopes, different companies person been overly punished by disruption fears. Case successful point: I3 Verticals, Inc. (NASDAQ:IIIV), which makes endeavor bundle for the nationalist sector, including schoolhouse outgo systems.

The shares slumped from astir $34 past autumn to beneath $20 successful May implicit concerns that emerging automation and instrumentality learning technologies are disrupting bundle stocks. In our view, these AI technologies are much apt to beryllium a payment than a disadvantage. The institution has chiseled advantages successful data, domain expertise, and method cognition successful a nationalist assemblage situation that's dilatory to follow caller technology. This dynamic creates a profoundly embedded level and unafraid relationships that i3 manages for lawsuit workflows. In fact, absorption precocious stated that customers volition apt determination astatine a slower gait for artificial quality adoption than IIIV is susceptible of delivering. Meanwhile, IIIV tin present outgo savings capabilities done its bundle that fund strained nationalist institutions request to bash much with less.

We judge net per stock should accelerate arsenic caller investments successful caller applications rotation retired to customers and absorption executes connected interior outgo savings initiatives done automation. Moreover, IIIV's accordant outlook for recurring gross growth, borderline expansion, and free-cash-flow procreation makes it charismatic to a imaginable strategical acquirer, which could beryllium a beardown anticipation successful coming years if the marketplace fails to afloat worth shares. Yet the banal terms is conscionable 10.3X fiscal twelvemonth 2026 EBITDA, which represents a steep discount to its largest peer, which trades astatine 17.1X contempt akin maturation and margins.  Another illustration of america splitting from the herd is successful Utilities. The assemblage was 1 of our detractors erstwhile it came to information enactment during the quarter. But galore of these companies person been indirect beneficiaries of the AI infrastructure buildout and person seen their valuations climb. In our opinion, it does not marque consciousness to instrumentality connected AI related risks successful this portion of the marketplace particularly fixed existent Utility valuations."