We recently compiled a list of the 10 Emerging AI Stocks that Outperformed the Broader Market This Month. In this article, we are going to take a look at where Innodata Inc. (NASDAQ:INOD) stands against the other emerging AI stocks.
In an interview with CNBC on November 25, Dan Ives, Global Head of Technology Research at Wedbush Securities said that he sees the AI sector entering a new phase, describing it as the start of a “fourth industrial revolution.” He believes the AI market is still in its early stages but will continue to grow rapidly. Ives highlighted software companies, which he believes will be key players in AI’s future, especially by 2025.
Apart from a handful of skeptics, most experts and analysts see AI as the most revolutionary technology of the 21st century. There has also been a rise in AI startups. According to a June report by Morgan Stanley, the tech IPO market is picking up after a two-year pause. High interest rates had previously dampened IPO activity, but demand is returning, especially for companies using AI to improve business operations or customer experiences. While challenges like high capital costs remain, the AI-driven growth in tech and healthcare sectors is fueling the IPO revival.
Read Also: 15 AI Stocks on Wall Street’s Radar and Jim Cramer’s List of 7 Energy Stocks for the Trump Trade.
Anticipating the Next Wave of Startup IPOs
One of the most promising startups the market is watching is Anthropic AI, an AI company focused on developing safe and reliable large language models. It has received funding from big names, including Amazon. The partnership designates AWS as Anthropic’s primary cloud and training partner, with a focus on improving AI capabilities through collaboration on machine learning hardware development.
Additionally, AI chipmaker Cerebras is seeking to go public with a valuation of around $7 to $8 billion, building on strong AI infrastructure demand. The firm filed for an IPO on September 30. MS expects 10 to 15 tech IPOs in 2024, driven by companies using AI in sectors like technology and healthcare.
Read more about these developments by accessing 30 Most Important AI Stocks According to BlackRock and Beyond the Tech Giants: 35 Non-Tech AI Opportunities.
For this article, we chose 10 AI stocks that have outperformed the S&P 500 over the last 30 days as of November 27. They are also popular among hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
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Innodata Inc. (NASDAQ:INOD)
30-day Stock Price Performance: 85%
Innodata Inc. (NASDAQ:INOD) focuses on AI data preparation, data engineering, medical record processing, and marketing communications, serving industries such as banking, insurance, technology, media, and finance. Innodata’s (NASDAQ:INOD) stock price performance is highly credited to its Q3 financial performance reported on November 7. Between November 7 and 8, the company’s stock price was up nearly 76%. Its GAAP EPS outperformed the estimates by a huge margin of $0.38, posting an EPS of $0.51. It also generated a revenue of $52.22 million, up over 135% year-over-year, in addition to a 337% rise in adjusted EBITDA.
Management increased 2024 revenue growth guidance to 88%- 92% and reported $26.4 million in cash with no debt. Based on this performance, Maxim Group’s analyst Allen Klee raised the company’s price target to $54 from $38 and maintained a Buy rating on the stock. Klee also sees the company as a leader in the AI sector.
Overall INOD ranks 1st on our list of the emerging AI stocks that outperformed the broader market this month. While we acknowledge the potential of INOD as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than INOD but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. This article is originally published at Insider Monkey.