Watch 3 Little-Known Mid-Cap AI Stocks That Have Climbed Past Month

Amidst surging AI infrastructure investments, Zacks highlights Innodata (INOD), Fastly (FSLY), and AeroVironment (AVAV) as promising mid-cap AI stocks with recent double-digit returns. INOD benefits from demand for data in training language models, projecting 40.3% revenue growth; FSLY's AI Accelerator enhances generative AI developer tools, forecasting 8.7% revenue and 16.7% earnings growth; and AVAV integrates AI into defense robotic systems, expecting 26.1% revenue and 33.6% earnings growth.

Analysis

The artificial intelligence sector is experiencing robust investment, highlighted by a projected $325 billion in AI infrastructure capital expenditure by four "magnificent 7" companies in 2025, a 46% year-over-year increase. This spending surge is creating opportunities for specialized mid-cap companies, with Innodata (INOD), Fastly (FSLY), and AeroVironment (AVAV) identified as noteworthy players that have recently achieved double-digit returns. Innodata, crucial for providing high-quality data for training large language models, anticipates 40.3% revenue growth for the current year, though earnings are expected to decline by -19.1%; its recent beta launch of a Generative AI Test & Evaluation Platform, powered by NVIDIA technology, signifies a strategic expansion. Fastly, an infrastructure software provider, recently unveiled its AI Accelerator to optimize LLM generative AI applications and is projected to see 8.7% revenue growth and 16.7% earnings growth in 2025, with its Zacks Consensus Estimate for 2025 earnings improving by 10% in the last 30 days, supporting its Zacks Rank #2 (Buy). AeroVironment, specializing in AI-integrated robotic systems for defense and government clients, is forecasted to achieve 26.1% revenue growth and 33.6% earnings growth for its current fiscal year ending April 2026, holding a Zacks Rank #3 (Hold), similar to Innodata. These companies are positioned to potentially benefit from long-term global AI spending, focusing on distinct niches within the AI ecosystem from data engineering and edge cloud infrastructure to defense applications.

Key Decisions for Investors

• Investors should consider these highlighted mid-cap AI stocks for targeted exposure to the rapidly expanding AI infrastructure theme, acknowledging their recent positive performance and the overall speculative optimism surrounding such 'little-known' entities.
• Fastly (FSLY) warrants particular attention due to its Zacks #2 (Buy) rating, positive 2025 earnings estimate revisions, and the launch of its AI Accelerator, positioning it favorably for growth in AI application optimization.
• For Innodata (INOD) and AeroVironment (AVAV), both rated Zacks #3 (Hold), investors should weigh their significant respective revenue growth projections (INOD: 40.3%; AVAV: 26.1%) and specific market niches against factors such as INOD's current year projected earnings decline (-19.1%) and AVAV's reliance on government sector demand.
• Closely monitor the commercial success of Innodata's new Generative AI Test & Evaluation Platform and the market adoption of Fastly's AI Accelerator, as these are key strategic initiatives that could significantly impact future performance.