2 No-Brainer AI Stocks to Buy Right Now: Innodata and InterDigital Lead the Charge

The AI revolution is reshaping industries, but navigating the sector’s volatility requires pinpointing companies with sustainable growth, strategic partnerships, and tangible financial results. Among the 2024-2025 performers, two stocks stand out as no-brainer buys: Innodata Inc. (INOD) and InterDigital, Inc. (IDCC). Both have delivered meteoric revenue growth, critical infrastructure advantages, and clear paths to monetization. Let’s dissect why these are top picks—and where risks lie.

1. Innodata Inc. (INOD): The Training Data Titan

Innodata’s 2024 performance was nothing short of extraordinary. Its Q4 revenue surged 127% YoY to $59.2 million, with full-year revenue nearly doubling to $170.5 million. This explosive growth is fueled by its role as a leading provider of high-quality training data for generative AI models.

Why Buy Now?

• Market Leadership: Innodata supplies data to major AI developers, including OpenAI and NVIDIA, positioning it as an indispensable partner in the AI supply chain.
• Momentum: Its 12-month trailing total return of 562% (the highest among listed AI stocks) reflects investor confidence.
• Scalability: The company is expanding partnerships and automating data labeling processes, which could drive even higher margins.

Risks to Consider

• Overvaluation: With a price-to-sales ratio of 12.5 (vs. the sector average of 6), some analysts warn of a correction.
• Dependency on Major Clients: If a key partner like OpenAI reduces demand, revenue could stall.

2. InterDigital, Inc. (IDCC): Licensing Powerhouse in the AI Arms Race

InterDigital’s Q1 2025 licensing deal with a major Chinese smartphone vendor—adding $40 million in annualized recurring revenue—highlighted its strategic agility. The company’s 140% YoY revenue growth and 189% EPS growth make it a standout in AI-driven licensing.

Why Buy Now?

• Global Reach: Its IP portfolio spans wireless, video, and AI technologies, with licenses in over 20 countries. The China deal underscores its ability to navigate geopolitical tensions.
• Cash Flow: Recurring licensing revenue provides stability amid volatile AI infrastructure spending.
• Undervalued: At a PEG ratio of 0.8 (below its 1.25 five-year average), it offers growth at a reasonable price.

Risks to Consider

• Regulatory Hurdles: U.S.-China trade disputes could disrupt its licensing model.
• Competition: Tech giants like Qualcomm and Samsung are also vying for patent licensing dominance.

Why These Stocks Beat the Alternatives

While Oracle (ORCL) and VNET Group (VNET) also shine, their valuations are less compelling:
- Oracle’s cloud infrastructure contracts are growing, but its 20%+ forward PEG ratio signals overbought territory.
- VNET’s data centers are critical for AI workloads, but its 11% YoY revenue growth lags behind INOD and IDCC’s triple-digit expansions.

Conclusion: Growth Meets Value in AI’s Next Phase

Both INOD and IDCC are positioned to capitalize on AI’s infrastructure boom and IP monetization. Innodata’s dominance in training data ensures it remains a supplier to every major AI model, while InterDigital’s licensing deals provide recurring revenue in a patent-heavy sector.

Key data points to back this thesis:
- Innodata’s 2024 revenue nearly doubled, with its 493% YoY EPS growth signaling profitability at scale.
- InterDigital’s licensing deal added $40 million to its top line, and its 189% EPS growth highlights operational efficiency.

While risks like overvaluation and regulatory shifts loom, these stocks offer the best balance of growth, cash flow, and strategic moats in today’s AI landscape. For investors willing to ride the AI wave, these are buys to hold through 2025 and beyond.