Key Takeaways
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These 10 firms integrate AI into their essential operations across sectors like healthcare, education, insurance, and enterprise software, currently addressing real customer needs.
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Market capitalizations vary from small to mid-cap, presenting a more attractive risk-reward dynamic compared to established tech giants that have already factored in AI’s dominance.
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Each company focuses on a specific niche where AI delivers tangible benefits, from lowering insurance claim costs to speeding up drug discovery processes.
- Discover 10 stocks we prefer over Freshworks ›
Although Nvidia and Microsoft are prominent in AI discussions, smaller companies addressing specific challenges with technology offer compelling investment options. The following 10 lesser-known firms do not create foundational models or AI chips; instead, they utilize existing AI technology to modernize outdated processes and inefficient sectors.
Identifying Investment Opportunities
From insurance underwriting to drug discovery, each company leverages AI strategically, distinguishing themselves from those merely using it as a marketing tool. Here’s why these 10 underappreciated enterprises are worth consideration for growth-focused investors aiming to capitalize on the next AI advancements.
Unique Business Applications
Freshworks (NASDAQ: FRSH) offers a SaaS platform for customer support and CRM, catering to over 68,000 clients worldwide. Their Freddy AI features democratize enterprise automation for small to mid-sized businesses, a segment often overlooked by larger competitors like Salesforce and ServiceNow. The company’s consistent revenue growth and improving margins indicate a successful AI strategy, although profitability remains a challenge.
Industry Innovations
Oscar Health (NYSE: OSCR) is a technology-driven health insurance provider aiming to enhance user interactions. Its Superagent AI assistant is designed to reduce costs and expedite services, granting it a competitive advantage in a typically slow-moving industry. With rising healthcare costs, Oscar’s innovative AI-first strategy holds potential to capture a considerable market share, contingent on effective execution.
Broadening Horizons
These 10 companies may not challenge Nvidia’s AI leadership, but they carve unique niches in considerable markets by applying AI to resolve specific challenges. While risks differ significantly—Lemonade and Oscar contend with insurance sector hurdles, Recursion’s success hinges on clinical trial outcomes, and BigBear is affected by government contract variability—diversifying investments across these hidden gems can mitigate risks while maintaining exposure to practical AI applications.
