Key Points

The analyst kept his buy rating intact.
Future gains in AI capabilities atop the platform are expected.
10 stocks we like better than Bandwidth ›

Traders showed strong interest in next-generation communications firm Bandwidth (NASDAQ: BAND) during recent sessions. Much of the excitement stemmed from a notable price target increase by a telecom analyst. Data from S&P Global Market Intelligence showed the shares had gained 14 percent for the week through early Friday.

Analyst sees AI opportunity

Ahead of Thursday's market open, B. Riley analyst Erik Suppiger raised the price target sharply. The new objective stands at $85 a share, up from the prior $55 level. He kept the buy rating on the name.

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Bandwidth provides the backbone for routing AI-driven voice services, and the analyst expects technology improvements to lift demand for its network offerings, per reports. He also lifted full-year 2027 forecasts to reflect the expected growth.

Suppiger noted that many developers are working to make AI voice more natural and capable of serving as a user agent. Bandwidth stands to benefit from this shift given its core business.

Room for further growth

Could this spark continued expansion at Bandwidth? Revenue in the first quarter jumped 20 percent year-over-year to $209 million, while adjusted net income climbed 18 percent.

The firm serves a specialized corner of today's communications market and appears positioned for meaningful gains as its underlying technology advances. The buy call looks attractive.

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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool recommends Bandwidth. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.