The Artificial Intelligence boom has created one of the most powerful growth cycles in market history. Yet the biggest AI names—NVIDIA, Microsoft, Broadcom, and others—now trade at extremely high valuations, offering low earnings yields and limited margin of safety.
For disciplined value investors, that raises an important question:
Where can you still find AI-driven growth without overpaying?
In a recent breakdown, Chuck Carnevale (“Mr. Valuation”) used FAST Graphs to uncover seven small-cap companies quietly benefiting from AI, many of which trade at attractive valuations far below their intrinsic value.
Chuck emphasizes a simple truth:
Real long-term returns come from buying great businesses at reasonable valuations.
Small-cap companies—especially those integrating AI into their products—often offer:
Below are the seven companies Chuck highlights as long-term opportunities for patient investors.
CleanSpark is evolving from a pure-play Bitcoin miner into a broader AI-ready data center provider. Its energy-rich infrastructure positions it well to support the compute demands of AI models.
But with two years of expected negative earnings, Chuck recommends adding this one to your watchlist, not your portfolio—yet.
Key Points:
Five9, a leader in cloud-based contact centers, has achieved a 100% AI attach rate on large enterprise deals. After years of extreme overvaluation, the stock now trades at a single-digit blended P/E—a dramatic disconnect from its strong double-digit earnings growth forecasts.
Why It Stands Out:
JAMF dominates Apple-focused device management and cybersecurity. It’s integrating AI into threat detection, automation, and enterprise security workflows. After an overvalued IPO period, the stock now trades below its forecasted growth rate.
Why It’s Attractive:
Ooma provides cloud communication services and is rolling out AI-driven analytics for small and mid-sized businesses. With low debt, solid operating cash flow, and mid-teens growth expectations, Ooma offers a compelling risk/reward profile.
Highlights:
PagerDuty leads in digital operations management and automated incident response. It is heavily integrating AI into predictive analytics and hyperautomation. Chuck likes the business, but the valuation is fair—not cheap—making this one a “wait for a better entry” opportunity.
Best For:
LiveRamp focuses on data collaboration, identity resolution, and privacy-first marketing technology—all areas seeing massive AI transformation. The company carries virtually no debt and has strong growth potential supported by increasing AI adoption.
Why It’s Compelling:
Sprout Social delivers AI-powered social media management tools and analytics. After a huge post-IPO run-up and subsequent crash, the stock now trades at a much more reasonable valuation despite high double-digit expected growth.
Chuck suggests this may be the most attractive buy-now opportunity on the entire list.
Why It’s a Favorite:
The best AI investments aren’t always the biggest or the loudest. Chuck’s analysis shows that true value often hides in smaller companies:
For investors willing to do research and think long term, these seven Small-Cap AI Stocks may offer some of the most compelling AI-driven opportunities available today.
If you’re ready to dig deeper, run these 7 small-cap AI stocks through FAST Graphs and explore their valuations, fundamentals, and long-term return potential with clarity and speed.
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Disclosure: No positions.
Disclaimer: The opinions in this document are for informational and educational purposes only and should not be construed as a recommendation to buy or sell the stocks mentioned or to solicit transactions or clients. Past performance of the companies discussed may not continue and the companies may not achieve the earnings growth as predicted. The information in this document is believed to be accurate, but under no circumstances should a person act upon the information contained within. We do not recommend that anyone act upon any investment information without first consulting an investment advisor as to the suitability of such investments for his specific situation.
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