3 Sneaky Good AI Stocks to Buy Now

Investing

Published: February 17, 2025 9:23 am

The artificial intelligence boom has fueled a multi-year stock market rally, but the industry is still in its early innings. Grand View Research anticipates that the AI industry will continue to maintain a 36.6% annualized growth rate from now until 2030.

Artificial intelligence is still in its early innings as tech giants scramble to spend billions of dollars on the latest chips. Few stocks have posted gains like Nvidia (NASDAQ:NVDA) over the past five years, but some sneaky AI stocks can end up outperforming the multi-trillion dollar corporation. These are three sneaking good AI stocks to keep on your radar.

Key Points

Undervalued AI stocks still exist after Nvidia’s boom.
These AI stocks aren’t household names yet, but they have already delivered impressive returns and have more room to run.
Nvidia made early investors rich, but there is a new class of ‘Next Nvidia Stocks’ that could be even better. Click here to learn more.

Innodata (INOD)

Innodata (NASDAQ:INOD) has outperformed Nvidia year-to-date and over the past five years. It’s a relatively unknown stock that has a market cap below $2 billion, and its partnerships with big tech giants suggest it can rally.

The company assists with processing and organizing data that form the digital infrastructure of large language models like ChatGPT. It’s essentially a “picks and shovels” stock for generative AI that helps big tech companies train their language models.

Innodata is just starting to experience hypergrowth. Revenue surged by 136% year-over-year in Q3 2024 and promptedthe company to raise its annual guidance. Innodata also grew its net income from $383k in Q3 2023 to $17.4 million in Q4 2024. That’s almost a 4,600% year-over-year increase. High top-line growth combined with a much higher profit margin (33.3% net profit margin in the most recent quarter) can power the stock higher.

TSS (TSSI)

Despite a 5,500% ascent over the past year, TSS (NASDAQ:TSSI) remains a hidden gem. It only has a $350 million market cap, but the business is booming. Revenue increased by almost 700% in the most recent quarter while net income more than 10x’ed.

The company provides end-to-end technology services for data center technology providers. Its partnership with Dell (NYSE:DELL) is critical for the bull thesis. The companies joined forces in a multi-year agreement that can generate visibility for TSS. However, Dell currently makes up all of TSS’s current revenue.

TSS’s success with Dell can lead to more customers. Revenue and net income are booming, so it’s possible that the company’s P/E ratio drops significantly due to financial growth.

Vertiv Holdings (VRT)

Vertiv Holdings (NYSE:VRT) is the biggest company on this list, with a $40 billion market cap. The company offers products and services for data centers, including liquid cooling solutions. Diluted EPS increased by 77% year-over-year in Q4 2024while revenue was up by 26% year-over-year.

The stock dipped after earnings because analysts didn’t like the guidance, but the correction presents a long-term buying opportunity. Data centers are in their early stages, and many tech giants remain comfortable with pouring billions of dollars into the industry. Vertiv stands to gain market share in the AI industry and is still down by more than 25% since the DeepSeek news came out. The market strongly overreacted to DeepSeek, and as more investors notice, Vertiv Holdings stands to gain momentum.

The stock can also receive a big boost upon a potential inclusion in the S&P 500. It’s one of the largest publicly traded corporations that fulfills the requirements for S&P 500 inclusion and may be one of the first stocks in line. Getting addedto the S&P 500 will boost Vertiv’s visibility and force fund managers who use the S&P 500 as a benchmark to buy more shares.