Best Artificial Intelligence (AI) Smallcap Stocks

Artificial Intelligence (AI) has been an emerging trend for quite some time due to its applications in healthcare, finance and other industries. This technological revolution has a huge potential to shape the future of the finance industry, which is why investors are always seeking investment opportunities in the AI sector. You would be surprised to know that there are some small-cap AI stocks that have the potential to grow way faster than their large-cap peers.

In this blog, we will discuss some of the best small-cap AI stocks in India, as well as their potential, risks and the future of the AI industry.

What are AI Smallcap Stocks?

AI small-cap shares are stocks issued by smaller IT corporations developing innovative AI solutions. These companies are using AI to develop superior software, data analytics tools, robots, or machine learning techniques that have a lot of applications in other sectors.  Small-cap AI stocks are very different from big companies as they are high-risk, but if they achieve success in developing superior products and services compared to their peers, then they have the potential to deliver huge returns in the future.

Why Invest in Small-Cap AI Stocks?

Small-cap AI companies are usually at the forefront of innovation and bring the most important contributions to machine learning, data analytics, and automation. The companies profit through the following ways as the following:

• High Growth Potential: Small-cap AI stocks have the potential to achieve exponential growth as the AI adoption rate accelerates.

• Undervalued Opportunities: A good number of companies in this category are undervalued, making them quite affordable for the stockholders to get in at very low prices.

• Diverse Applications: AI Applications are complex and show different tendencies in e-commerce, travel, health care, and IT services.

Market Information of AI Smallcap Stocks

Company	Share Price (in ₹)	Market Capitalization (In ₹ Crores)	52 Week High Price (in ₹)	52-Week Low Price (in ₹)
Saksoft Ltd.	218	2,895	320	168
Zensar Technologies Ltd.	794	18,024	840	513
Happiest Minds Technologies Ltd.	738	11,239	961	692
Cyient Ltd.	1,777	19,725	2,365	1,652
Kellton Tech Solutions Ltd.	159	1,553	184	85
Affle India Ltd.	1,781	25,021	1,884	998

Read Also: Best Artificial Intelligence (AI) Stocks In India

Overview of the Top Artificial Intelligence Small-Cap Stocks in India

An overview of the best AI small-cap stocks to invest in 2025 are listed below:

1. Saksoft Ltd

Incorporated in 1999, Saksoft is one of the leading companies in India that has expertise in AI and digital transformation. It deals with data management, business intelligence, and analytics. The company has made great acquisitions, such as DreamOrbit, to diversify its operations in the IoT and logistics space, and the acquisition of Faichi Solutions marked its entry into the health tech sector. 

Saksoft Ltd employs generative AI for performance monitoring & optimization, software engineering, strategy development, etc., that increases operational efficiency in very high-growth environments such as fintech, health care, and logistics. Utilizing data engineering and nurturing innovation, Saksoft enables businesses to achieve higher growth through data-driven insights.

Know the Returns:

1Y Return (%)	3Y Return (%)	5Y Return (%)
-17.44%	169.59%	1,092.25%

2. Zensar Technologies Ltd

Zensar Technologies Ltd, is a global IT service company established in 1991 that employs AI & innovative solutions in cloud computing, data analytics, and digital transformation. It is headquartered in Pune, India, with offices in the UK, US, South Africa and Singapore.

Zensar is actively developing the latest AI technologies to help businesses harness the power of AI and increase their efficiency. The company has developed multi-modal generative AI solutions to effectively model text, images, audio and video. VISCA tool integrates AI and large language models to improve search experiences for B2B and B2C sectors by careful analysis of images, text and voice inputs. Other AI solutions developed by the company include enterprise AI engineering, Responsible AI and Enterprise Cognitive Hyper-Automated Operations (ECHO).

Know the Returns:

1Y Return (%)	3Y Return (%)	5Y Return (%)
32.20%	54.06%	324.37%

3. Happiest Minds Technologies Ltd

Happiest Minds Technologies Ltd, is one of the most well-known digital transformation companies around the world. Most of their solutions are AI-enabled, such as cloud computing, IoT, and cybersecurity. The Bangalore-based company was founded in 2011 by Ashok Soota. It has achieved some really impressive milestones since then and was listed on the Indian stock market in 2020.

Happiest Minds has acquired several companies in the past years, such as Pimcore Global Services, in 2021 to strengthen its capabilities in digital experience management and data management. The organization also received many awards, ranking it among India’s top IT service providers when it comes to innovation and employee satisfaction. Being equipped with AI-based offerings, Happiest Minds is improving customer experience through business operations, enhancement in security mechanisms, and operational efficiency, thereby positioning the organization as a leader in AI-driven digital revolution.

Know the Returns:

1Y Return (%)	3Y Return (%)	5Y Return (%)
-19.89%	– 44.49%	107.14%

4. Cyient Ltd

Cyient Ltd, incorporated in 1991 and headquartered in Hyderabad, India, is among the world’s leading companies in the technology sector. Key milestones include the early adoption of digital transformation technologies and support to the biggest aerospace, defense, and infrastructure projects around the world. 

Cyient develops solutions for the aerospace, automotive, mining, energy, and semiconductor sectors. With its AI-based offerings, such as predictive maintenance analytics, intelligent transportation systems, and advanced digital engineering, Cyient allows its clients to optimize their operations and minimize downtime. Through its AI solutions, Cyient continues to push boundaries for efficiency and competitiveness across industries.

Know the Returns:

1Y Return (%)	3Y Return (%)	5Y Return (%)
-18.61%	76.08%	326.95%

5. Kellton Tech Solutions Ltd

Established in 1993, Kellton Tech Solutions Ltd is an IT company that provides end-to-end digital transformation solutions across the globe using cutting-edge technologies such as AI, IoT, and blockchain. The company has enjoyed multiple milestones over the years: its strategic acquisition of ProSoft Group Inc. in 2014 and the acquisition of PlanetPro in 2015 expanded its capabilities to develop end-to-end enterprise IT solutions and customer engagement. 

Kellton Tech has developed utilitarian AI that helps you transform your data into insights and actions. It helps businesses track customer behavior and enhance customer experience with personalized interactions and tailored recommendations. Its core competency for integrating technology with traditional processes strengthens the operations of manufacturers and retailers, helping them leverage the power of AI.

Know the Returns:

1Y Return (%)	3Y Return (%)	5Y Return (%)
60.94%	140.44%	897.71%

6. Affle India Ltd

Affle India Ltd, was founded in 2005 as a leader in mobile marketing and now offers AI-driven advertising and consumer engagement solutions. Appnext, a proprietary platform built by the company, uses user data for personalized app recommendations. The result is higher conversion rates and, thus, improved campaign performance.

Important acquisitions include the Vizury Commerce Business in 2018, which enhanced its retargeting media capabilities and MediaSmart in 2020, which helped to create programmatic advertisements and sync advertising campaigns across screens. These strategic moves expanded its global footprint and diversified its offerings.

Affle India continues to optimize mobile advertising performance by using AI insights, thereby maximizing marketing ROI for brands and effectively reaching the right audience. Its innovative approach and stronghold on AI technology will help it maintain its position as the leader in the competitive mobile advertising industry.

Know the Returns:

1Y Return (%)	3Y Return (%)	5Y Return (%)
32.77%	28.64%	464.25%

Read Also: 5 Top Artificial Intelligence Penny Stocks in India

Key Performance Indicators

Company	Net Profit Margin (%)	ROE(%)	ROCE (%)	Debt to Equity Ratio	EV/EBITDA
Saksoft Ltd.	12.62	19.02	23.09	0.02	16.59
Zensar Technologies Ltd.	13.56	18.66	23.63	0.00	12.60
Happiest Minds Technologies Ltd.	15.28	16.78	21.59	0.30	24.26
Cyient Ltd.	9.83	16.03	20.61	0.11	16
Kellton Tech Solutions Ltd.	6.51	14.43	18.30	0.29	9.88
Affle India Ltd.	16.13	11.90	13.09	0.07	32.39

Benefits of Investing in Smallcap AI Stocks

The benefits of investing in smallcap AI stocks are:

• State-of-the-Art Technology: Smallcap AI companies have the expertise to help businesses streamline their operations with the help of technology.

• Market Disruption: AI technology has the potential to disrupt conventional industries, which will give investors an option to earn extraordinary returns.

• Agility: Small-cap companies are able to adapt to market changes and customer demands quicker than bigger companies.

Risks of Investing in Smallcap AI Stocks

The risks of investing in smallcap AI stocks are:

• Volatility: These smallcap AI stocks can be volatile due to adverse market trends, speculative trading, etc.

• Intense competition: The fierce competition from established IT companies will likely be the main barrier to the success of smallcap AI stocks.

• Limited resources: Small companies may face issues in their business operations, such as scaling up due to the lack of sufficient resources.

• Regulatory challenges: The adoption of AI technologies can be much slower than expected if the regulatory policies are not favorable.

Future of the AI Industry in India

The future of AI looks promising due to the reasons mentioned below:

• Wide-scale Applications: Companies developing AI solutions can witness an increase in their revenues as their products and services have applications in many industries.

• International Collaboration: International collaboration with some big tech giants is leading innovation and funding for AI-focused start-ups.

• Expanding Talent Pool: The talent pool is growing in India, which will ensure that the country will have a steady supply of skilled professionals for the AI industry.

Conclusion

Artificial intelligence small-cap stocks have the potential to be an excellent investment for those who would like to benefit from the adoption of AI technologies. The future of industries will be defined by solutions and innovations from companies like Saksoft, Happiest Minds, Affle India, etc. These are some of the best small cap AI stocks that will drive your portfolio performance in the near future.

The companies mentioned in this blog have a promising future but do not forget to consider your risk tolerance and diversify your investments to achieve a balance of risks and rewards. AI is the future, and investing in small-cap AI stocks can be one of the best ways to be a part of this digital transformation.

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