This $42 Stock Could Be Your Ticket to Millionaire Status
Key Points
Innodata helps the top tech companies annotate their AI data.
The market’s demand for those time-saving services is soaring.
- 10 stocks we like better than Innodata ›
Innodata (NASDAQ: INOD), which went public in 1993, was once considered a slow-growth provider of content digitization, digital publishing, and data enrichment services. But in 2018, it launched a suite of task-specific microservices that could efficiently annotate large amounts of high-quality data for AI applications. The market's demand for these services skyrocketed as the AI market expanded, and its stock soared 2,750% over the past six years.
Image source: Getty Images.
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Investors might be wary of chasing Innodata's stock after those massive gains, but it could generate even bigger millionaire-making gains for three simple reasons.
First, at least five of the Magnificent Seven companies already use Innodata's services to prepare their AI-oriented data. Second, when those tech companies launch a new AI project, they often spend 80% of their time preparing the raw data and just 20% training the actual algorithm. Innodata's services allow them to spend a lot more time training their algorithms.
Lastly, Innodata's stock still looks reasonably valued relative to its growth potential. From 2024 to 2027, analysts expect its revenue and EPS to grow at CAGRs of 36% and 12%, respectively. At $42, it trades at 36 times its projected 2026 EPS. With a market cap of $1.4 billion, it could also be a tempting takeover target for a bigger tech company as the AI war intensifies.
Should you buy stock in Innodata right now?
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Leo Sun has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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