Industry Overview - The momentum of the artificial intelligence (AI) infrastructure segment is expected to continue into 2026, supported by a bullish demand scenario [1] - Concerns exist regarding the overstretched valuations of major AI companies, including both infrastructure developers and application implementers [1] Investment Opportunities - Several small and mid-sized AI stocks that underperformed the broader market in the past year are identified as potential game changers for 2026, including UiPath Inc. (PATH), Five9 Inc. (FIVN), Qualys Inc. (QLYS), Teradata Corp. (TDC), and BlackBerry Ltd. (BB) [2] - Each of these stocks currently holds a Zacks Rank of 1 (Strong Buy) or 2 (Buy) [2] Company Highlights UiPath Inc. (PATH) - UiPath provides a robotic process automation platform that utilizes AI to automate repetitive tasks and streamline operations [5] - The platform features embedded AI, machine learning (ML), and natural language processing (NLP) capabilities, enhancing decision-making and information processing [6] - Expected revenue and earnings growth rates for the next year are 9.3% and 13.7%, respectively, with a 5.6% improvement in the earnings consensus estimate over the last 30 days [8] Five9 Inc. (FIVN) - Five9 offers intelligent cloud software for contact centers, benefiting from a rise in subscription revenues and Enterprise AI revenues [10] - The platform includes interactive virtual agents and AI insights, optimizing customer interactions across various channels [12] - Expected revenue and earnings growth rates for the current year are 9.5% and 8.3%, respectively, with a 1.3% improvement in the earnings consensus estimate over the last 60 days [15] Qualys Inc. (QLYS) - Qualys is experiencing increased demand for cloud-based cybersecurity solutions amid rising cyber threats [16] - The company has made strategic acquisitions to enhance its growth, including Blue Hexagon, which improved its threat detection capabilities [17] - Expected revenue and earnings growth rates for the current year are 7.7% and 6.5%, respectively, with a 10.4% improvement in the earnings consensus estimate over the last 60 days [19] Teradata Corp. (TDC) - Teradata's prospects are bolstered by improvements in annual recurring revenue (ARR) growth and cost-saving measures [20] - The company offers a portfolio that includes advanced analytics and AI capabilities, which are expected to drive top-line growth [21] - Expected revenue and earnings growth rates for the current year are -0.6% and 3.6%, respectively, with an 8.3% improvement in the earnings consensus estimate over the last 60 days [23] BlackBerry Ltd. (BB) - BlackBerry provides intelligent security software and services, leveraging AI for cybersecurity and data privacy [24] - The QNX business is gaining traction in the automotive sector, with its software suite installed in over 275 million vehicles [27] - Expected revenue and earnings growth rates for the next year are 7.4% and 13.3%, respectively, with a 6.3% improvement in the earnings consensus estimate over the last 30 days [28]

Market Overview - The AI-driven bull run of 2023 and 2024 has faced significant challenges in 2025 due to the Fed's uncertainty regarding rate cuts, recession fears, and competition from low-cost Chinese AI platforms [1] - Concerns over the Trump administration's tariff and trade policies have negatively impacted investor confidence in risky assets, particularly in the technology sector [2] Company Analysis: Arista Networks Inc. (ANET) - Arista Networks is positioned well with a robust network architecture for cloud and AI networking, focusing on proactive products, zero-touch automation, and predictive operations [6] - The company's EOS Smart AI Suite and Arista AVA enhance AI job monitoring and network security, catering to the growing demand for high-performance switching products [7][8] - ANET has an expected revenue growth rate of 18.7% and earnings growth rate of 12.8% for the current year, with a 4% improvement in earnings estimates over the last 30 days [9] - The average price target for ANET indicates a potential increase of 19.3% from the last closing price of $92.79, with a maximum upside of 40.1% [10] Company Analysis: Five9 Inc. (FIVN) - Five9 offers intelligent cloud software for contact centers, providing a comprehensive platform for customer service and sales functions [11] - The company has seen growth from the adoption of AI tools in call center services, with the introduction of its Intelligent CX Platform powered by Five9 Genius AI [13] - FIVN has an expected revenue growth rate of 9.6% and earnings growth rate of 11.7% for the current year, with a 6.6% improvement in earnings estimates over the last 30 days [14] - The average price target for FIVN suggests a potential increase of 35% from the last closing price of $27.11, indicating a maximum upside of 139.8% [15] Company Analysis: HubSpot Inc. (HUBS) - HubSpot provides a cloud-based CRM platform, experiencing steady adoption from enterprise customers and benefiting from pricing optimization [16] - The integration of HubSpot AI features is enhancing customer value, with a focus on lowering barriers for new customers [17] - HUBS has an expected revenue growth rate of 15.4% and earnings growth rate of 14.9% for the current year, with a 2.1% improvement in earnings estimates over the last 30 days [18] - The average price target for HUBS indicates a potential increase of 23.9% from the last closing price of $616.92, with a maximum upside of 50.7% [19]