GoPro’s AI Pivot: A Lifeline for the Struggling Action Camera Giant?

The iconic action camera company GoPro is fighting for survival, but an unexpected opportunity in artificial intelligence might just provide the turnaround the business desperately needs. As sales of its traditional hardware continue to decline, the firm is betting on a surprising new revenue stream: licensing user-generated videos to train AI models. The critical question for investors is whether this strategy can halt the stock's precipitous decline.

Despite the overarching challenges, GoPro recently unveiled a trio of new products in September. These include the MAX2 with 8K resolution, the compact LIT HERO, and the AI-powered Fluid Pro AI Gimbal. The latter, launched on October 3rd, actually triggered a nearly 4% surge in the share price, demonstrating that markets remain receptive to fresh innovation from the brand.

The company's market position also received a boost from a legal victory. The US International Trade Commission confirmed that rival Insta360 had infringed on GoPro's patents, providing a defensive win.

Deepening Core Business Woes

Beneath these positive signals, a more troubling reality persists. For the third quarter, GoPro has projected a staggering 38% year-over-year revenue drop. Unit sales are anticipated to fall by 25%, with the company forecasting a loss of $0.04 per share. These figures paint a clear picture of a core camera business in severe distress.

The AI Gambit: A New Revenue Frontier

In a radical strategic shift, GoPro is leveraging its most unique asset: a vast library of first-person action footage. Since late July, US-based subscribers have been able to license their cloud-stored videos for AI training purposes, receiving a 50% share of the revenue generated. The initiative has seen overwhelming initial engagement, with users already submitting over 125,000 hours of video content.

Should investors sell immediately? Or is it worth buying GoPro?

This pivot could potentially open the door to the booming AI market, offering a much-needed diversification away from the volatile hardware sector.

Market Sentiment: Skepticism Amidst Volatility

The financial community, however, remains largely unconvinced. The consensus analyst rating sits at "Sell," with a meager price target of just $0.75. This projection implies a potential further collapse of over 60% from current levels. Insider sentiment appears equally cautious, with company executives offloading more than $215,000 worth of stock in the last three months.

From a technical analysis perspective, there are faint signs of hope. The stock recently broke above its 200-day moving average, a development closely watched by chartists. Furthermore, despite the headwinds, GoPro shares have managed to advance by more than 100% since the start of the year, suggesting a cohort of investors still believes in a potential recovery.

All eyes are now on the quarterly earnings report scheduled for November 6th. This release will be crucial in determining whether GoPro can successfully navigate the transition from its fading camera business to an emerging AI-driven revenue model—or if the company is nearing its final chapter.