Todd Gordon is adding to this AI financial services play caught up in Tuesday's selloff

Todd Gordon Sees Opportunity in AI Financial Stock After Market Dip, Signaling Value for Investors

Imagine the insurance world as a giant, old lemonade stand. For years, it’s been run the same way. Now, a new kid called Lemonade is using robots and smart tech to sell lemonade faster and cheaper. This shake-up matters because it could change how people everywhere buy insurance—and how investors make money from it.

Why Lemonade and AI Matter for Investors

Lemonade (LMND) is a company using artificial intelligence (AI) to make insurance quicker and easier. Instead of paperwork and long waits, Lemonade lets people buy insurance online in minutes. This is a big deal for investors because the insurance industry is huge but hasn’t changed much in decades. If Lemonade’s way works, it could grab a big slice of the market and make a lot of money for early investors.

Insurance is a $1.3 trillion industry in the U.S. alone, according to the Insurance Information Institute. Even a small change can have a big impact.

The Bull Case: Reasons to Be Excited

  • AI Advantage: Lemonade uses smart computers to set prices, approve new customers, and handle claims. This cuts costs and makes things faster.
  • Young Customers: Most of Lemonade’s customers are younger people who like doing everything online. These customers might stick around for years.
  • Growth: Lemonade’s sales are growing fast—expected to jump 36% in 2025, and even more the year after.
  • Beating Expectations: Lemonade has surprised Wall Street by doing better than expected for three quarters in a row.
  • Stock Recovery: After falling a lot since its 2020 IPO, Lemonade’s stock has bounced back, regaining about 61.8% of its big drop.

The Bear Case: Reasons to Be Careful

  • Still Losing Money: Lemonade is not profitable yet. It spends more than it makes, which can be risky if growth slows down.
  • Big Competition: Old insurance companies are huge and have deep pockets. If they catch up with technology, Lemonade could face tough battles.
  • Stock Volatility: The stock price moves up and down a lot. It recently held up better than some AI stocks, but big drops are still possible.
  • Market Mood Swings: Investors are focused on fast growth now, but if that changes, stocks like Lemonade could get hit hard.
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What the Charts and History Tell Us

Lemonade’s stock took a nosedive after its 2020 debut, dropping more than 80%. But since late 2023, it’s been climbing again. Right now, the stock is trying to break through a key price—around $62. If it pushes higher, some investors believe it could go up to $101, based on past trading patterns called Fibonacci retracements.

Historically, other tech-driven companies like Tesla or Amazon also lost money for years before turning a profit and rewarding patient investors. But many others never made it. That’s why it’s important to watch both the promise and the risks.

Investor Takeaway

  • Watch Key Price Levels: If Lemonade’s stock breaks above $62 and holds, it could signal more upside. Set stop-losses to protect yourself if it drops.
  • Focus on Revenue Growth: Fast sales growth is a good sign, but keep an eye on when (or if) Lemonade starts making money.
  • Diversify: Don’t put all your eggs in one basket. AI in insurance is exciting, but it’s also risky.
  • Follow Industry Trends: If big, old insurance companies start using AI too, Lemonade’s edge may shrink. Stay alert to news in the sector.
  • Be Patient and Manage Risk: Exciting stories can lead to big wins—or losses. Decide how much you’re willing to risk, and stick to your plan.

For the full original report, see CNBC

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