I’m not saying you missed the boat on Innodata (NASDAQ: INOD) this year, but if you didn’t hop on before, you might want to grab a really strong Monday morning drink for this one. In short, this small-cap AI company is now officially up an insane 496.02% YTD, and after reporting some spicy Q3 results, it’s definitely not slowing down. In fact, just last week alone, Innodata rallied an additional 102.46%. Friggin ‘crazy. 

(Source: Giphy) 

So, what’s all the hype about? Well, first off, last week's moonshot came after the company reported record-breaking third-quarter revenues of $52.2M, up 136% YoY. For more context, that’s about $19.7M more than they pulled in during Q2. 

What’s more, is that it’s not just the top line that’s cashin’ checks and snappin’ necks—net income exploded to $17.4M from a measly $0.4M in the same quarter last year. If you’re wondering how that happened (besides selling a bunch of AI magic), a cheeky tax benefit of $5.6M didn’t hurt either.

(Source: Yahoo Finance) 

But let’s talk about what really matters: cash. Innodata’s cash position nearly doubled to $26.4M since the end of 2023. And unless the CFO is stuffing it under a mattress, that’s a serious war chest for further growth. This ended up resulting in Innodata doing the one thing Wall Street cares about more than their favorite stripper during happy hour: They raised their full-year revenue guidance to 88-92% growth. Translation: That’s bigly. 

(Source: Investing.com) 

Now with that said, what’s really interesting here is that Innodata isn’t just another AI startup trying to make waves—it’s already got big fish on the hook. For instance, the company now counts five of the Magnificent Seven tech giants as customers (think: Apple, Microsoft, Alphabet, Amazon, Meta, Nvidia, and Tesla). Meaning, they are batting 71% on the top names in the industry bank rolling their revenue.  

(Source: Yahoo Finance) 

In fact, Innodata’s 60% sequential revenue growth from Q2 to Q3 is proof that their AI-focused strategy is catching fire. And with their generative AI and LLM data engineering services driving demand, they’ve found themselves in the right place at the right time, as tech companies throw money at AI like it’s the last free buffet on Wall Street.

Naturally, Innodata CEO Jack Abuhoff is feeling pretty good about it too - as he’s throwing around his confidence that the world’s largest tech companies, who are sinking massive investments into AI, will continue to fuel Innodata’s growth. And honestly, who can blame him? When your customer list looks like the Forbes Tech Billionaire Index, it’s hard not to get excited.

(Source: Giphy) 

But, but, but… sure, Innodata is piling up the wins, but let’s not forget that this is a capital-intensive business. Building AI platforms and keeping the lights on isn’t cheap. They’re going to need every cent of that $26.4M cash pile, especially since they’ve got Big Tech and the government breathing down their neck for more products. 

Plus there’s the challenges of scaling that Innodata faces. As we’ve seen, every AI company loves to talk about growth until they hit the wall of “oh, we need more servers.” And once that happens, only time will tell before they start getting the short end of the stick on publicity that screams “Investors concerned on AI spending” like we’ve seen with Microsoft and Google. 

(Source: Giphy) 

But for now though, it’s clear that Innodata is crushing it. The company’s stock closed at $42.20, up 319.80% over the last six months and a ridiculous 3,584.93% over the last five years. That’s not just a win, that’s a full-blown field day. 

Meaning, while Innodata has emerged as last week's top player - with record revenue growth, a growing Big Tech customer base, and a cash position stronger than ever, this small-cap AI play is making serious moves. So if you haven’t been paying attention, now might be the time to start. Especially since, in the world of AI, it’s not just about who’s building the coolest tech—it’s about who’s getting paid to do it. And right now, Innodata is cashing in.

(Source: Reuters) 

So yeah, do what you will with this information, but if you’ve been sleeping on Innodata - wake up. Only time will tell when we’ll see the next leg of momentum surge in Innodata prices and when that comes, I highly doubt you’ll want to be on the sidelines for it. In the meantime, place your bets accordingly and as always stay safe and stay frosty, friends! Until next time…

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Stocks.News holds positions in Apple, Microsoft, Alphabet (Google), Meta, Tesla, and Amazon as mentioned in the article.