3 AI Stocks You Haven’t Heard of With Explosive Upside Potential

Most of Wall Street piled into the Magnificent Seven stocks in the past few years, and although a lot of that flow has diverted into alternative AI stocks, it’s only a few dozen or so familiar names. All of these AI stocks are trading at historically expensive multiples, and it’s hard to see them delivering triple-digit upside from here.

The rally has been extraordinary so far. But with the Nasdaq-100’s price-earnings ratio at 41.4x, basically at 2021 bubble levels, it’ll be an uphill battle to keep defying gravity.

If you want multibagger gains in the next twelve to eighteen months, it’s a better idea to look where no one else is looking. They have strong growth and many of them have already broken out, with lots of room to keep climbing. Here are the three AI stocks to look at for explosive upside potential:

Aeluma (ALMU)

Aeluma (NASDAQ:ALMU) is up 684% in the past year, but the breadth of its use cases and the momentum can cause it to double again. The market capitalization is still $384 million. The semiconductor company specializes in high-performance technology, with applications in mobile, automotive, AI, defense & aerospace, communication, AR/VR, and quantum computing.

The company secured contracts from NASA and the U.S. Navy in July. Less than a month before, it received a U.S. Department of Energy contract for scalable semiconductor sensors. Despite these contracts, ALMU stock is still relatively unknown on Wall Street. 

The defense contract is to accelerate high-speed photodetectors that will sit inside next-generation optical links on ships and drones. NASA is backing the same platform for free-space optical comms on small satellites, where every gram costs millions when launching.

Aeluma has exposure to almost every high-tech sector investors are chasing at the moment.

It’s still a loss-making company, but the losses can be sustained. Revenue for the nine months of fiscal 2025 came in at $3.35 million, up from $639,286 the year before. Most of that revenue is from early government and industrial development deals, but they can scale to high-volume orders in the coming years.

Benchmark Equity Research sees Aeluma crossing $39 million in annual sales by 2028, which they believe “will prove conservative.” Per Benchmark, the tech is “…significantly de-risked through its collaborations with premier U.S. government agencies like DARPA, NASA, the U.S. Navy, as well as industry leaders such as Thorlabs. These partnerships provide more than just revenue; they offer crucial third-party technical validation, affirm the technology’s strategic importance, and pave a smoother path toward broader commercial adoption.”

GDS Holdings (GDS)

GDS Holdings (NASDAQ:GDS) is a company you’ve likely never heard of before, even though the market cap is at $6.91 billion. GDS stock is up 239.4% in the past year, and any other AI company with those metrics would regularly be in the headlines. The reason is mostly due to the company operating in China.

It’s the Equinix of China, though it trades at a fraction of the valuation and sits at the epicenter of a domestic AI build-out that Beijing has declared a national priority. GDS signs long-term leases with hyperscalers such as Alibaba, Tencent, and ByteDance, then delivers turnkey space, power, cooling, and interconnectivity. And it only builds these data centers if it has committed demand.

Last year, the company raised $1 billion to expand capacity outside of China, and Chinese hyperscalers have been hoarding capacity due to the post-DeepSeek AI investment boom.

Analysts see 12.2% revenue growth this year and 14.2% revenue growth next year. Sales growth could cross 15% due to the accelerating interest in AI by Chinese companies.

You’re paying ~20 times EV here. As the company finishes building out its data centers and starts generating solid cash flow, the valuation could pop more.

MDA Space (MDALF)

MDA Space (OTCMKTS:MDALF) is a Canadian space-defense company. It makes and operates complete satellite constellations, space-based robotics, and Earth-observation platforms.

Its Satellite Systems division builds small and mid-sized spacecraft for low, medium, and geostationary orbits, and it is already running a one-per-week production line that management intends to scale to two per day by 2027.

MDA is also under contract for Phase C of Canadarm3, the robotic system that will service NASA’s lunar Gateway station, and it is using that same know-how in a commercial offering called MDA Skymaker for satellite servicing and debris removal.

Q1 revenue hit CAD 351 million, up 68% year-over-year, while adjusted EBITDA came in at CAD 68.6 million with a 19.5% margin. Backlog at quarter-end stood at CAD 4.8 billion, and management reiterated guidance for 45% top-line growth and 40% EBITDA growth this year.

The post 3 AI Stocks You Haven’t Heard of With Explosive Upside Potential appeared first on 24/7 Wall St..