Episode summary
3 Small Cap AI Stocks for Your Watch List
Zacks Market Edge
· · 21 min · Hosts: Tracey Ryniec
Summary
Tracey Ryniec argued that the AI trade is spreading beyond the obvious semiconductor winners and into smaller companies that are building, servicing, or enabling the infrastructure behind data centers. She highlighted three small-cap names she believes could benefit as hyperscalers keep spending heavily on AI: Willdan Group, Duos Technologies Group, and Innodata.
Key takeaways
- Tracey Ryniec said Willdan Group looks more attractive after its pullback because it trades at about 20 times earnings while still showing revenue growth and AI-related demand from data-center buildouts.
- Ryniec said Duos Technologies Group is a higher-risk transformation story, with management guiding to more than $50 million of 2026 revenue and only one analyst covering it.
- Ryniec said Innodata is benefiting from generative AI data work, with revenue up 54% year over year and a new big-tech customer expected to generate about $51 million in 2026.
- Ryniec emphasized that the AI opportunity is flowing into ancillary firms on the energy, engineering, edge-data-center, and data-engineering sides, not just the largest chip makers.
Notable quotes
“As the AI trade matures, it gets a bit hotter. More money is flowing to the ancillary companies from the hyperscalers”
“We have some nice double- digit earnings growth or uh revenue side growth expected this year”
“they have launched a duos technology solution segment within the company now as well”
“We believe Innovata is entering a golden age of innovation”
How the episode opens
Stocks, bonds, ETFs, straight out of downtown Chicago. This is Zach's Market Edge. Welcome to Zach's Market Edge, the podcast about investing in your life.
I'm your host, Tracy Reinick, and this week I'm going solo to talk about some hidden AI stocks that are pretty hot, and we know that most of the AI stocks are, but what are these? They are small cap stocks. Several of them, maybe actually all of them I've talked about on podcasts in the past.
A couple of them were brought to us by Zach, small cap analyst Mark Zinski. So, I'm just doing an update on those, but a lot is going on with all three of these stocks. As the AI trade matures, it gets a bit hotter.
More money is flowing to the ancillary companies from the hyperscalers. Now, if they really are spending 700 billion plus on AI just this year, who's getting all that money? Maybe these three companies are getting at least some of it.
So, let's dive right in. The first one out of the gate is Wilden Group, ticker WLDDN, and they have a market cap of 1.4 billion. So that is considered on the small cap side.
Uh anything really under 10 billion seems like a small cap these days. But of course there's the true small caps around this size two billion and under and then there's just small in comparison to the Nvidas of the world but Wilden 1.4 billion. And you can see it's exact number three.
So they have reported earnings already. And what do they do? So they are on we have them in business services as the industry but they are in energy planning, consulting, engineering, you know that kind of thing on on the AI side.
Now recently they did acquire Burton Energy Group which serves Fortune 500 companies and it will double the services they can provide to commercial markets and that's on the management consulting side.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- small cap ai
- ai trade
- stock picks
- watch list
- market edge roundup
Companies and tickers mentioned
- NVDA
- WLDN
- DUOT
- INOD
- Nvidia
- Willdan Group
- Duos Technologies
- Innodata
Watch the episode
Watch “3 Small Cap AI Stocks for Your Watch List” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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