Multibagger Selection: DeepSeek's picks

INOD

Innodata is a small-cap AI data engineering company that has established itself as a critical partner in the AI revolution, providing high-quality training data and evaluation services for advanced language models. The company delivered Q2 2026 revenue of $92.14 million, up 58% year over year, marking its 12th consecutive quarter of year-over-year revenue growth. Adjusted gross margin expanded to 49% in Q2 2026 from 40% a year earlier, and adjusted EBITDA jumped 91.6% to $25.36 million. Cash provided by operating activities totaled $164.44 million for the first six months of 2026, sharply higher than $14.99 million in the year-ago period. Management raised full-year 2026 revenue growth guidance to approximately 40% or more, up from 35% or more. Customer diversification improved meaningfully, with the largest customer accounting for 37% of Q2 revenue, down from 56% in Q1. The stock trades at a forward P/E that has compressed materially as earnings estimates have risen faster than the share price.

AEHR

Aehr Test Systems is a small-cap semiconductor test equipment company that has positioned itself as a critical supplier for AI accelerator, CPU, and network processor burn-in and reliability testing. The company reported record quarterly bookings of $60.7 million in Q4 fiscal 2026, up more than 500% from $11.1 million in the prior-year quarter, and entered fiscal 2027 with an effective backlog above $100 million. Management issued fiscal 2027 revenue guidance of $130 million to $150 million, representing year-over-year growth of approximately 160% to 200%. Almost 95% of fiscal 2026 revenue came from markets outside electric-vehicle silicon carbide, with AI accelerators, CPUs, and network processors representing approximately 71% of annual revenue. Gross margins are structurally high, and the company has demonstrated operating leverage as volumes scale. The stock has pulled back significantly from its 2026 highs despite strengthening fundamentals, creating a dislocation.

ASYS

Amtech Systems is a small-cap semiconductor equipment company that supplies specialized tools, consumables, and services for wafer fabrication and, increasingly, advanced semiconductor packaging. Its TrueFlat reflow oven is a critical piece of equipment used to package ultra-thin substrates found in next-generation AI GPUs and accelerators. In fiscal Q3 2026, revenue rose to $22.4 million with AI-related revenue in Thermal Processing Solutions increasing approximately 120% year over year. Consolidated gross margin expanded to 50% from 46.7% a year earlier. Customer orders rose to $28.8 million from $21.1 million sequentially, while backlog increased to $28.7 million from $22.3 million. Adjusted EBITDA was $3.3 million, approximately 15% of revenues. The company has undergone a product-line rationalization focused on higher-margin AI packaging solutions, and the market is still assigning a modest multiple relative to the improving margin profile and AI exposure.

BBAI

BigBear.ai is a small-cap AI company focused on national security, defense, intelligence, and border security applications. The company delivered Q2 2026 revenue of $36.7 million, up 13% year over year, with gross margin expanding 781 basis points to 32.8%. The company reported more than 20 new contract wins in Q2 2026 and a 9% increase in H1 backlog, including over $60 million in national security contracts. BigBear.ai is among the most shorted stocks on Wall Street, with approximately 31% short interest and a days-to-cover ratio of about 10 days as of early October 2026, creating conditions for a potential short squeeze if positive catalysts materialize. The company has $410 million in cash and marketable investments, sufficient to sustain operations for nearly four years at the Q2 burn pace, and has significantly deleveraged its balance sheet following the redemption of $124.6 million in 2029 convertible notes.

HTFL

HeartFlow is a small-cap healthcare technology company that uses AI and computational modeling on coronary CT scans to deliver non-invasive 3D heart assessments for coronary artery disease. The company reported Q2 2026 revenue of $64.1 million, up 48% year over year, with gross margin of 83.0%. Management raised full-year 2026 revenue guidance to $246-250 million. The key catalyst is the transition of HeartFlow Plaque Analysis to a Category 1 CPT code

(75577) effective January 1, 2026, with defined Medicare payment rates in both clinic and hospital settings, which sets up a path for more routine clinical use and a new revenue stream. Commercial coverage already covers 57% of U.S. lives. The company is targeting mid-term gross margins of 85% and is moving toward profitability as plaque analysis revenue scales in the second half of 2026.