Innodata, Ambarella, and Symbotic could attract more attention soon.
The Trump administration’s “Liberation Day” tariffs on most of America’s trading partners recently deflated many of the market’s hottest artificial intelligence (AI) stocks. While the AI market should keep growing, higher tariffs could force many companies to rein in their spending on those expensive projects until the macro environment stabilizes.
But if we dig deeper, we’ll find some under-the-radar AI stocks that could still be worth accumulating in this volatile market. Let’s look at three of those AI plays — Innodata (INOD 5.21%), Ambarella (AMBA -1.14%), and Symbotic (SYM 4.80%) — and see why they might beat the market over the long term.
Image source: Getty Images.
1. Indata
Innodata, which went public in 1993, was considered a slow-growth analytics software company for most of that past three decades. But in 2018, it launched a suite of task-specific microservices for preparing data for AI applications.
When big tech companies such as Microsoft and Amazon develop a new AI project, they often spend 80% of their time preparing the data and just 20% of that time training the algorithm.
To shorten that time-consuming process, five of the “Magnificent Seven” companies started to use Innodata’s microservices to clean up their data for their AI services. Those contracts caused Innodata’s revenue and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to surge 96% and 249%, respectively, in 2024.
Innodata’s growth could slow down if the macro headwinds drive its top customers to rein in their AI spending. But over the long term, it should weather those challenges and keep dominating its high-growth niche of the AI market.
From 2024 to 2026, analysts expect its revenue and adjusted EBITDA to grow at a compound annual growth rate (CAGR) of 31% and 29%, respectively. But with an enterprise value of $938 million, it still isn’t expensive at 23 times this year’s adjusted EBITDA. Therefore, this could be a great growth stock to accumulate if the market slump continues.
2. Ambarella
Ambarella is leading producer of image processing system on chips (SoCs) and computer vision chips for security cameras, drones, connected vehicles, and other products. Its SoCs enable cameras to process high quality photos and videos at higher speeds, while its computer vision chips use AI to understand the images they see.
Over the past few years, Ambarella’s growth was throttled by U.S. export curbs against some of China’s top security camera makers, macro headwinds for the automotive and Internet of Things (IoT) markets, and competition from other chipmakers.
But in fiscal 2025, which ended in January, Ambarella’s revenue rose 26% as it narrowed its adjusted net loss. That growth was driven by the stabilization of its auto and IoT businesses, as well as its higher sales of AI-oriented CV5 computer vision chips for driverless vehicles, robotic cameras, and consumer electronics. As it revved up those growth engines, it reduced its exposure to China’s security camera market.
From fiscal 2025 to fiscal 2028, analysts expect Ambarella’s revenue to grow at a CAGR of 18% as it gradually narrows its net losses. With an enterprise value of $1.6 billion, it looks reasonably valued at four times this year’s sales.
Ambarella isn’t immune to the incoming macro headwinds, but semiconductor makers were exempted from the Trump administration’s latest tariffs. Therefore, Ambarella should keep growing over the long term — even if the near-term challenges drive its top customers to rein in their spending to cope with those higher costs.
3. Symbotic
Symbotic produces fully autonomous warehouse robots. It claims that a $50 million investment in just one of its modules, which bundles together its robots and software, can generate $250 million in lifetime savings over 25 years.
That’s a bold claim, but Walmart is its top investor and biggest customer. It holds a long-term deal to automate all 42 of Walmart’s regional distribution centers in the U.S. through 2034, and that deal accounted for 87% of its revenue in fiscal 2024, which ended last September. For the full year, its revenue rose 55% as its adjusted EBITDA turned positive.
Its overwhelming dependence on Walmart might seem like a red flag, but it could also insulate it from the incoming tariffs. It could also drive more retailers to follow Walmart’s lead and install Symbotic’s modules to reduce their operating expenses.
From fiscal 2024 to fiscal 2027, analysts expect its revenue and adjusted EBITDA to grow at a CAGR of 25% and 76%, respectively. At its enterprise value of $891 million, it looks like a bargain at 0.4 times this year’s sales. This little AI stock could soar higher over the next few years as it continues to fulfill Walmart’s orders, gains more customers, and scales up its business.
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Leo Sun has positions in Amazon. The Motley Fool has positions in and recommends Amazon, Microsoft, Symbotic, and Walmart. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
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