3 Undervalued Mid-Cap Stocks Set to Benefit from the AI Revolution

Core Insights - Investors are increasingly focusing on mid-cap stocks to enhance their portfolios, particularly in the context of the ongoing AI boom [1] - The total addressable market for enterprise software is expected to grow significantly, presenting opportunities for mid-cap stocks [1] Group 1: Qualys (QLYS) - Qualys is a leader in cloud security and compliance, with over 10,000 customers and a strong position in the cybersecurity sector [2] - The company’s revenue for FY23 increased by 13% year-over-year to $554.5 million, with net income rising to $151.6 million, or $4.03 per share [2] - Qualys is guiding for double-digit revenue growth in Q1 FY24, with GAAP EPS projected in the range of $0.84 to $0.92 [2] Group 2: Science Applications International (SAIC) - SAIC is an aerospace and defense contractor with a strong AI strategy and a diverse portfolio of cybersecurity and cloud solutions [3] - In Q3 2023, SAIC's net income and EPS increased by 16% and 21%, respectively, despite flat revenue [3][4] - The company has a backlog of $23.1 billion, indicating strong future growth potential [4] Group 3: Allegro MicroSystems (ALGM) - Allegro MicroSystems is a global leader in sensor and power integrated circuits, having shipped over 11 billion integrated circuits [5] - The company reported a 16% year-over-year revenue increase to $276 million, with E-Mobility growth accelerating by 60% year-over-year [6] - Allegro's technology is crucial for the AI revolution, particularly with the expansion of data centers [5][6]