Episode summary
3 Small Cap AI Stocks You Should Know
Zacks Market Edge
· · 47 min · Hosts: Mark Zinski
Summary
Mark Zinski argues that AI spending is still likely to keep flowing, but the market is increasingly separating the winners from the hype. He is cautious on expensive software and frontier-model IPO talk, but sees better opportunities in small-cap infrastructure and adjacent service names tied to data centers, power, and back-office automation.
Optical Cable Corp. (OCC) is presented as a classic picks-and-shovels AI play: fiber-optic cable for data centers and other harsh-environment uses, with backlog rising to 10.4 million from 6.6 million a year earlier and gross margin improving to 32.7%. Capstone Green Energy (CGEH) is the power angle, supplying microturbines that can provide electricity, heat, and cooling for data centers and industrial users, with Zinski pointing to stronger adjusted EBITDA and international demand as the business scales.
Aries Technology (AERT) is the most speculative idea. Zinski sees a private-equity-driven GCC consulting model that uses AI and lower-cost labor to automate back-office functions, and he highlights management’s fiscal 27 guidance of 80 to 84 million in revenue and 10 to 12 million of adjusted EBITDA against a much smaller market cap. He frames all three as undervalued, but says AERT carries the most execution risk.
Key takeaways
- Zinski thinks AI spending will continue, but he prefers infrastructure and enablement names over headline software or chip winners.
- OCC’s backlog rose to 10.4 million from 6.6 million, and Zinski says that could re-rate a stock trading near 1x trailing sales.
- CGEH is betting on data-center power needs with microturbines that can also handle heat and cooling, while its Q3 adjusted EBITDA rose to 5.1 million from 0.5 million.
- AERT targets private-equity clients building global capability centers, and Zinski says its fiscal 27 guidance could make the stock look very cheap if execution holds.
- Zinski says all three names were recently launched as outperform-rated ideas, but AERT is the most speculative because of its small size and model risk.
Notable quotes
“their backlog went up substantially uh it went up to 10.4 million versus 6.6 million in the prior year”
“They recently raised their fiscal 26 uh guidance. Um but they also gave fiscal 27 guidance and that fiscal 27 guidance calls for revenue of 80 to 84 million and adjusted ibida of 10 to 12 million”
“these are all rated outperform um and were recently um launched on within like the last week or so”
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 have a guest. As promised, Zach's small cap analyst, Mark Zinski, is back on the podcast, and he's bringing us those small cap stocks. Now remember the difference between Mark and myself.
Mark is actually an analyst. I'm just a strategist. So I look at the bigger picture.
Mark is actually looking at these companies and uh looking at their fundamentals and what's going on. And so I love having him on the podcast because he's bringing us some I would call them secret secret stocks that nobody's really talking about because they're small caps and who's talking about them? Nobody.
And this week he's brought us some more AI plays and we know we love them. So welcome back Mark.
Oh thanks Tracy. Okay, so we're talking about AI stocks again. Uh we're going to do three stocks this time.
We have done two in the past, but we have a a bounty of riches and we're doing three. Um so what what is going on in the AI uh area? Not even just with small caps, but what what's happening on Wall Street right now with AI with this trade?
Everybody knows like Nvidia, the semiconductors are kind of just treading water. They're not those stocks aren't really going anywhere. You can even have Jensen Wong, the the CEO of Nvidia on on um you know at these conferences talking now about a trillion dollar worth of spend on the chips this year.
Not 500 billion, but a trillion dollars. And the stock stock doesn't really go anywhere. In fact, it I think it went down on this news.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- small cap ai stocks
- stock picks
- 2026 outlook
Companies and tickers mentioned
- OCC
- AERT
- OCC
- AERT
- CGEH
Watch the episode
Watch “3 Small Cap AI Stocks You Should Know” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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