Insiders Are Betting Big on This AI StockArtificial intelligence (AI) is reshaping industries across the globe, with 35% of businesses incorporating AI into their workflows according to Business Insider. While much of the early AI buzz focused on high-profile players like OpenAI and Nvidia, the next phase of AI's integration may lie in specialized applications—and education is poised to be a major frontier.
One company making strides in this space is Nerdy Inc. NYSE:NRDY , which leverages AI to personalize learning across over 3,000 subjects. With growing interest in the NRDY ticker evident on Google Trends and insider activity suggesting confidence from leadership, there may be a unique opportunity brewing for investors looking to capitalize on this late-stage AI play.
The Case for AI in Education
AI’s potential in education is immense. Tools like chatbots and adaptive learning platforms are already being deployed to personalize tutoring and enhance engagement. For instance, Arizona State University has implemented AI-driven tools to track student progress and recommend resources, while Carnegie Mellon uses AI to power its Open Learning Initiative, helping students master subjects faster.
Despite its promise, AI-driven education remains underexplored compared to sectors like healthcare or logistics. This presents an opportunity for companies like Nerdy Inc. to revolutionize how education is delivered at scale while addressing challenges in accessibility and customization.
Insider Trading
Recent insider trading activity paints an intriguing picture. CEO Charles K. Cohn has made multiple stock acquisitions , including a purchase of 3,000,000 shares on December 13, 2024, and another acquisition of 2,000,000 shares on December 16, 2024, totaling millions of dollars in recent months. Such moves often signal leadership’s confidence in the company’s future.
Positive Earnings Surprises
Nerdy Inc. has consistently delivered positive earnings surprises :
- Q4 2023: 54.55%
- Q1 2024: 36.36%
- Q2 2024: 33.33%
- Q3 2024: 39.13%
This trend of exceeding expectations suggests that Nerdy is not only executing well but also potentially under-appreciated by the market.
The Strategic Play: Leveraging LEAPS Options
Sprouting companies like Nerdy Inc. often follow a predictable cycle of accumulation and distribution on the part of institutions. After an initial public offering, we typically observe a period of stabilization under SEC-regulation M, which mandates price support from underwriting syndicates.
During this phase, a rally may occur as the public begins to buy in. However, newer applications—like personalized AI learning—often require time to gain mass adoption. Following this rally, we frequently see a sell-off as qualified institutional buyers (QIBs) exit their initial positions.
The most critical phase is accumulation , during which institutions steadily acquire discounted shares. This process may take months or years, but the goal for investors is clear: align with the institutions.
The Setup
- Contract: June 20, 2025 $1.50 Call
- Premium: $0.40 per share
- Position Size: 50 contracts
- Total Risk: $2,000 (plus transaction fees)
This strategy caps downside risk while allowing ample time for institutional accumulation and potential media-driven interest.
Risk vs. Reward
If Nerdy Inc. recaptures its 2020 IPO price of $10 per share, the potential profit is substantial:
($10 market price - $1.50 strike price) x 5,000 shares = $42,500 profit
While ambitious, this scenario aligns with patterns seen in AI-driven stocks like NASDAQ:PLTR and NASDAQ:RGTI which also benefited from strong catalysts and public speculation. Plus NASDAQ:CLBT and NYSE:OPFI to name a few others outside the realm of AI.
A Long-Term Perspective
AI’s role in education is just beginning. Nerdy Inc.’s commitment to personalized learning places it in a unique position to capitalize on this transformative trend. The combination of strong insider activity, positive earnings surprises, and growing interest in AI-powered education makes this a compelling speculative opportunity.
What do you think about AI’s role in transforming education? Will companies like Nerdy Inc. lead the charge, or will traditional methods continue to dominate?
General Disclaimer
This content is for informational and educational purposes only and should not be considered personalized investment advice. The information provided does not constitute an offer to buy or sell any securities, nor does it take into account your specific financial situation, objectives, or risk tolerance.
The views expressed are based on information believed to be reliable but are not guaranteed for accuracy or completeness. Investing involves risks, including the loss of principal, and past performance is not indicative of future results.
For personalized investment recommendations, please consult a licensed financial advisor. The author assumes no liability for actions taken based on the information provided in this post.
