Why Innodata Stock Skyrocketed 103% in September

Key Points

• Innodata benefited from a bullish forecast from Oracle.

• Broader tailwinds in artificial intelligence (AI) also gave the stock a boost.

• Innodata is one of the few small-cap AI stock available on the market.

• 10 stocks we like better than Innodata ›

In a banner month for artificial intelligence (AI) stocks, one of the biggest winners in the stock market was small-cap, data-labeling company Innodata (NASDAQ: INOD).

According to S&P Global Market Intelligence, Innodata stock finished the month up 103%. Surprisingly, there was no major news out on the stock last month. Instead, Innodata seemed to benefit from a broader surge of interest in AI stocks, as a number of news items indicated that capital expenditures for AI data centers were soaring.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

As you can see from the chart, the stock rose almost steadily over September, with very few losing days, which is rare for a stock that gains so much so fast.

INOD data by YCharts

What's happening with Innodata?

One of the biggest days for Innodata last month came on Sept. 10 following Oracle's earnings report. Oracle surged and took much of the AI sector up with it as it gave a bold forecast for AI infrastructure spending. The company said it expected Oracle Cloud Infrastructure revenue to jump 77% to $18 billion this fiscal year, and reach $144 billion by fiscal 2030. The eye-popping growth forecast wowed investors and lifted estimates for AI-related spend across the board.

Oracle stock jumped 36% on Sept. 10, while Innodata gained 8.4% on high-volume trading that session. The news also seemed to fuel extended gains in the stock, as Innodata didn't have a losing session until Sept. 24 after that.

Innodata doesn't work with Oracle directly, but it does host data on Oracle Cloud, as well as other major cloud infrastructure services.

The Oracle announcement also shows that the amount of AI data is expected to grow exponentially, which is a boon for a company that specializes in helping organizations improve their data quality, annotating data at scale. Interest in data labeling, as this industry is known, also jumped after Meta Platforms spent $14 billion for a 49% stake of Scale AI, a data-labeling start-up, in June.

Image source: Getty Images.

What's next for Innodata?

Innodata has been growing rapidly, but it's still one of the smallest AI stocks on the market, making it appealing for investors looking for lesser-known AI picks.

Revenue jumped 79% to $58.4 million in its second quarter, and the company is profitable, with an adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) profit of $13.2 million.

While a stock doubling on no news would typically be a reason to be wary of it, Innodata still trades at a price-to-sales ratio of 13, so there's more upside potential in the stock, especially if it can maintain its current growth rate.

Should you invest $1,000 in Innodata right now?

Before you buy stock in Innodata, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Innodata wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $626,942!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,157,870!*

Now, it’s worth noting Stock Advisor’s total average return is 1,063% — a market-crushing outperformance compared to 191% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of September 29, 2025

Jeremy Bowman has positions in Meta Platforms. The Motley Fool has positions in and recommends Meta Platforms and Oracle. The Motley Fool has a disclosure policy.