This Overlooked AI Stock Could Outperform Nvidia in 2026, According to Analysts

• Innodata’s information annotation concern is thriving arsenic the AI marketplace continues to expand.

• Most of the "Magnificent Seven" companies already trust connected its services.

• Its banal isn’t cheap, but it could merit its premium valuation.

• 10 stocks we similar amended than Innodata ›

Nvidia (NASDAQ: NVDA) has been 1 of the market's best-performing artificial quality (AI) stocks. The chipmaker's shares rallied astir 1,240% implicit the past 5 years arsenic its income of information halfway GPUs, which are utilized to process analyzable AI tasks, skyrocketed.

As the apical shaper of picks and shovels for the AI golden rush, Nvidia inactive has a agleam future. From fiscal 2025 (which ended this January) to fiscal 2028, analysts expect its gross and net per stock (EPS) to some turn astatine a CAGR of 41% arsenic the AI roar continues. Those are stellar maturation rates for a banal that trades astatine 28 times adjacent year's earnings, and it could ascent different 31% to deed Wall Street's mean 12-month terms people of $237.94 per share.

Yet analysts expect different oft-overlooked AI banal to present adjacent bigger gains than Nvidia. That institution is Innodata (NASDAQ: INOD), a information analytics institution that helps ample tech companies hole their information for AI projects. Over the adjacent 12 months, analysts expect its terms to soar astir 68% to an mean terms people of $93.75.

We should instrumentality Wall Street's rosy estimates with a atom of salt, but Innodata has already outperformed Nvidia implicit the past 5 years with a summation of astir 1,400%. Let's spot wherefore Innodata's banal soared -- and if it tin really outperform Nvidia adjacent year.

Innodata was founded successful 1988, and it didn't pull overmuch attraction erstwhile it went nationalist successful 1993. At the time, it seemed similar conscionable different small, slow-growth information services provider. Its contented digitization, integer publishing, and information enrichment services each served niche customers, were labor-intensive, and hard to scale. From 1994 to 2019, its gross lone grew astatine a CAGR of 6%. At the extremity of 2019, it was trading astatine conscionable $1.14 per share, which was 32% beneath its split-adjusted IPO terms of $1.67.

But successful 2018, Innodata launched a suite of task-specific microservices that efficiently annotated ample amounts of high-quality information for AI applications. The market's request for these services skyrocketed arsenic the AI roar started, and astatine slightest 5 of the Magnificent Seven companies present usage its services to cleanable up and hole their AI-oriented data.

When ample tech companies motorboat a caller AI task connected their own, they mostly walk 80% of their clip simply preparing that earthy information and conscionable 20% of the clip grooming the existent algorithm. That's a painfully costly and inefficient process, truthful it's a batch smarter to outsource each of that enactment to Innodata.