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Tom Yeung here with today’s Smart Money.
When OpenAI launched ChatGPT in late 2022, shares of Nvidia Corp. (NVDA) did virtually nothing for several months. Like an old, lazy dog, the stock sat at a split-adjusted $17 even as millions of users downloaded the AI chatbot.
But then, NVDA began to rise.
$20… $50… $150…
The old dog learned new tricks.
By the time 2026 rolled around, the stock had risen past $190 – an 11X return in four short years. Investors had belatedly realized how many graphics processing units (GPUs) ChatGPT and its rivals would need, and how crucial Nvidia would become as a GPU supplier.
Nvidia Corp. (NVDA) share price
Source: LSEG
The same happened with shares of SK Hynix Inc., one of the largest producers of memory chips. Investors showed only moderate interest in the South Korean company through 2025… and thenbought shares in late-2025 after memory chip prices began to surge from AI demand.
SK Hynix share price
Source: LSEG
These two firms aren’t alone. Advanced Micro Devices (AMD)… Intel Corp. (INTC)… Arm Holdings PLC (ARM)… almost all AI stocks have gone through a “hockey stick” moment. Shares moved sideways until some AI-related shortage hit Wall Street in the face. Then stocks shoot upwards, creating the classic hockey stick pattern we now see.
Many investors owned these companies before their breakouts. Eric himself notched a triple-digit return on AMD in his flagship stock-picking subscription service, Fry’s Investment Report.
Others were less fortunate – either missing the AI boom entirely or only benefiting through broad-based retirement funds.
Either way, everyone I know seems to ask themselves: “Why didn’t I buy more when I had the chance?”
Fortunately, you still can.
Today, there are still a handful of companies that look like Nvidia in late 2022 and SK Hynix in mid-2025. These firms produce crucial AI data center components, and are underpriced simply because Wall Street hasn’t yet realized what shortages are about to happen from AI data center demand.
In today’s Smart Money, I’d like to highlight three of these companies. Then, I’ll share where you can find more of these overlooked picks.
AI Stock to Buy No. 1: Powering the AI Revolution
AI data centers are power hungry animals with rather inconsistent appetites. During the day, these AI hyperscalers are working full tilt to answer user queries and perform AI inference tasks. This draws immense amounts of electricity for computing and cooling. In the evenings, demand drops off.
That brings me to my first AI recommendation:
Fluence Energy Inc. (FLNC)
Fluence was created in 2017 as a joint venture between Siemens and AES Corporation. The pitch was straightforward: The two firms realized that renewables were becoming a major part of grid output, and utilities needed to store power for when the wind didn’t blow and the sun didn’t shine. Fluence was created to sell massive batteries and specialized software at utility scale.
The company is now at the forefront of AI data center power.
Earlier this week, management announced that order intake doubled to $2.0 billion from a year earlier, largely thanks to data center demand. The company is now in discussions covering 36-gigawatt hours of projects – enough to supply more than two dozen AI hyperscale data centers with the backup power they typically need. More growth is likely on the way as AI data centers start building their own power plants to address grid shortages. (These smaller power plants often need even more load balancing from batteries because they are not connected to a larger grid.)
That’s going to have an incredible impact on Fluence’s growth. Revenues should rise 47% this fiscal year and 23% the next, flipping the company’s $48 million loss in 2025 to a $30 million profit by 2027… and then to $100 million a year after that.
Thankfully, Fluence’s recent rally only captures part of that upside. Shares still trade well below their original IPO price despite a 28% post earnings jump this week. For the growth-seeking investor, Fluence Energy is an appealing blend of growth potential and reasonable prices..
Fluence (FLNC) continues trading below its IPO price
Source: LSEG
AI Stock to Buy No. 2: The AI Conduit
AI hyperscale data centers can require thousands of miles of cabling. A single Nvidia NVL72 rack uses nearly 5,000 NVLink copper cables – coiling several miles of the stuff into a medium-sized cabinet. There are also medium-voltage cables for powering servers… high-voltage cables for cooling systems… and more.
That brings me to my next pick:
Atkore Inc. (ATKR).
Atkore is an American manufacturer that builds power systems products. These include conduits, cable management products, metal framing, mechanical pipes and other “behind the wall” items that keep electricity and data flowing.
The company enjoyed unusually strong profitability during the post-pandemic construction boom. Shares surged fivefold to nearly $200 between mid-2020 and early 2024 as revenues and profits ballooned. Homeowners and electricians were paying top dollar to complete home renovation projects.
ATKR then came crashing back down in 2025 after construction demand dried up. Shares have now fallen back into the $70 range.
That brings us an unusually well-priced opportunity. Management has forecasted that revenues should start growing again this year, thanks to double-digit growth in data center demand and a resurgence of solar projects. Profit growth should soon catch up in fiscal 2027.
That’s makes Atkore a potential breakout hiding in plain sight. Analysts are still pricing the company as a cyclical housing play. In fact, it’s a company faced with rising demand as a multi-year buildout of AI data centers begins.
Atkore (ATKR) shares remain depressed, even as AI demand rises
Source: LSEG
AI Stock to Buy No. 3: The “Eyes” of the AI Revolution
Wall Street already knows that self-driving cars and robots are the next frontier of the AI revolution. Humanoid robot company Figure AI was valued at $39 billion in private markets last year, and Google’s self-driving unit, Waymo, was priced at roughly $126 billion in a 2026 funding round.
But how do these cars and robots “see” the world?
The answer here is my third pick:
Hesai Group (HSAI).
Hesai is the Chinese tech company that dominates the market for lidar systems – the devices that autonomous electronics use to sense the world around them. The company supplies over 60% of the global robotaxi market, all top 10 carmakers in China, and 40 other automotive brands across the world. They are also the primary lidar partner for Nvidia’s DRIVE Hyperion 10 platform – the autonomous driving system developed by the chipmaker. It’s a high-volume business that’s already turned Hesai into a profitable entity.
The Chinese firm is also seeing growth from robotics – namely humanoid robots and self-driving lawnmowers. The firm shipped nearly 240,000 robotics lidar units in 2025 and expects that figure to “at least double” this year.
That will add even more growth to Hesai’s already rapid rise. I expect revenue to increase at least 43% this year and 40% the next, which should almost double its earnings per share to $6.35 by 2027.
In addition, American investors are relatively unaware of Hesai, given that it’s a Chinese stock that’s spent most of the past three years below its original IPO price.
As SK Hynix shows, these mismatches don’t usually last forever. At some point, American investors will realize how consolidated the lidar market has become under Hesai. If the pace of self-driving vehicle deployment triggers a shortage of these devices, then those sitting on the sidelines will feel like it’s Nvidia in 2023 all over again.
Hesai (HSAI) has remained range-bound since 2025
Source: LSEG
The Next Stage of the AI Revolution
These three firms all have the same thing in common:
They have largely traded sideways even as AI demand races ahead.
The mismatch can last a while. Earnings can increase without stock prices going anywhere. This is called a “P/E compression.”
But eventually, this compression turns into a coiled spring.
One of the best examples of this is an AI-focused payments processor in Fry’s Investment Report. Since 2020, earnings of this high-quality firm have marched steadily higher, even as its share prices declined.
The result is that shares now trade at below 9X forward earnings… down from 50X in 2021. And that’s happening even as this company expands in AI-related payments processing. You will soon be able to buy products through ChatGPT by using your “wallet” with this select firm.
Another of Eric’s key picks is a company where AI is the business. The company has built what is arguably the world’s most sophisticated AI-powered system to grade electronics, and this rapidly growing business trades at just 12X forward earnings.
Just yesterday, Eric released his monthly Fry’s Investment Report issue for May. In the issue, he explains how the next big AI winners may not be the companies building AI models, but the companies applying AI most effectively in the real economy.
He also recommends one new buy to survive the AI age.
Click here to learn more.
Until next time,
Thomas Yeung, CFA
Market Analyst, InvestorPlace
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