3 Under-the-Radar Tech Stocks That Could Outperform the Nasdaq in 2026

The article highlights three AI-linked small-cap stocks with improving fundamentals, led by Iren’s $9.7 billion five-year Microsoft deal for 200 megawatts and its $3.4 billion Nvidia deal for 60 megawatts. Iren now expects $3.7 billion in contracted annual recurring revenue by year-end and has a 5-gigawatt pipeline, while MaxLinear posted 43% year-over-year Q1 revenue growth and guided Q2 revenue to $165 million at the midpoint. Innodata reported $90.1 million in Q1 revenue, up 54%, and said a new customer could contribute up to $51 million this year, supporting its raised outlook for 40% revenue growth in 2026.

Analysis

The common thread here is that the AI buildout is moving from a chip narrative to a power-and-pipeline narrative. The strongest asymmetry sits with infrastructure names that can convert scarce compute demand into contracted revenue, because hyperscalers are increasingly willing to pay up for capacity certainty rather than chase greenfield build risk. That favors operators with energized sites and financing access, while compressing the odds that pure-play silicon beneficiaries keep rerating at the same pace once capacity constraints shift from GPUs to power delivery and interconnect.

IREN looks like the cleanest second-order winner because the market is still underappreciating the option value of its pipeline relative to near-term contracted ARR. The key insight is that software and orchestration capability should improve utilization and gross margin mix, which matters more than headline megawatts once deals become multi-year and customer concentration risk becomes a pricing issue. The near-term catalyst is not just additional contracts, but evidence that the company can monetize the same MW stack at better economics as it expands into new geographies.

MXL is more of an operating inflection than a story stock: the setup suggests the market may still be discounting the pace at which optical interconnect can re-rate when sequential growth becomes visible. The risk is that this is still a lumpy infrastructure ramp, so the stock can overshoot on one quarter and then stall if guidance proves too early; the best way to express the view is around earnings windows, not as a blind multiple expansion trade. INOD is the quietest beneficiary, because its improving customer mix reduces single-client dependence and makes revenue durability more credible, but the real upside comes if investors begin capitalizing it as a recurring data-infrastructure layer rather than a services vendor.

The contrarian miss is that the market may be extrapolating AI demand correctly but misallocating the beneficiaries. If capex shifts from training-scale GPUs to inference, connectivity, and data preparation, then names like NVDA and the megacaps may remain good businesses but not necessarily the best stock returns from here. The cleaner trade is to own the bottleneck enablers with visible backlog and short-duration catalysts, while staying alert for any sign that hyperscalers start slowing take-or-pay commitments if power availability, monetization, or utilization slips.

Key Decisions for Investors

• Long IREN vs short a basket of megacap AI proxies (e.g., NVDA/MSFT equal-weighted) for 3-6 months: express the view that contracted capacity monetization is earlier in the cycle than chip monetization; target outsized relative performance if IREN converts pipeline into ARR faster than the market models.
• Buy MXL into earnings on pullbacks, with a 1-2 quarter horizon: use a call spread rather than stock if available, because the setup is a sequential-growth inflection and the main risk is a post-print multiple reset if guidance merely confirms rather than accelerates.
• Add INOD as a long-duration compounder over 6-12 months, but size modestly: the thesis is not peak growth, it is customer diversification and better quality of revenue, which should support multiple expansion if the market starts valuing durability over headline growth.
• Pair trade: long IREN / short a capital-intensive data center REIT or utility proxy for 3-6 months: the goal is to isolate the premium for AI-ready energized capacity and higher-margin software leverage versus low-growth regulated yield assets.
• Set event-driven exit discipline: if IREN or MXL miss near-term utilization/guide by more than ~5%, reduce exposure quickly; these names can lose momentum fast because the market is pricing a multi-year ramp off a small number of data points.