Skip the Megacaps: These 2 Under-the-Radar AI Stocks Have More Room to 10X
2026-10-02 13:13
•Micah Zimmerman •The Motley Fool
••••• ••• Axe Cap view
Skip the Megacaps: These 2 Under-the-Radar AI Stocks Have More Room to 10X
Innodata and BigBear.ai show strong growth and big contracts, presenting a riskier but potentially rewarding AI play.
The AI buzz tends to spotlight the usual suspects, but that often means paying a premium for tech giants with stretched valuations. Innodata (INOD) and BigBear.ai (BBAI) offer a different story. Innodata is growing revenue fast, over 50% year on year, and shifting from basic data labeling to a software platform model, which should mean better margins. BigBear.ai just locked a $900 million ten-year deal with the US Air Force—this isn’t a flash in the pan but a committed pipeline in defense AI. Both are still small, unprofitable, and beaten down by broader tech sell-offs. For South African investors, while these names trade in the US, USD/ZAR sensitivity is high: a weaker rand could worsen returns, but a stable rand and better US tech sentiment could make them attractive risk-rewards. The main risks? Execution hurdles and cash burn remain. If these companies stumble, the upside narrows fast. this is just our opinion and not financial advice
Wait to add if you have a high-risk tolerance and want exposure to early-stage AI plays, but size positions small and watch rand moves closely. Avoid if you can’t stomach volatility or FX risk.
- USD/ZAR
- INOD
- Execution risk in transitioning business models
- Currency risk from USD/ZAR fluctuations
5/10
Innodata and BigBear.ai are positioned as undervalued AI stocks with significant growth potential. Innodata reported 58% revenue growth and is transitioning to a software platform model, while BigBear.ai secured a 10-year, $900 million Air Force contract. Despite strong fundamentals, both stocks remain beaten down and don't yet reflect their recent progress, though both remain speculative and unprofitable.
Our take is based on reporting first published by The Motley Fool.