The AI boom isn’t only about chatbots or self-driving cars — it’s about shadow empires and multi-million dollar contracts quietly weaponizing data for governments, the military, and Fortune 500s.
Behind closed doors, these contracts are worth billions — yet most retail investors have no clue.
While most investors pile up like sheep buying Palantir and Nvidia, I’ve pinpointed four tiny AI stocks (<$5B market cap) replicating Palantir’s playbook — each positioned for potential explosive growth.
Let’s dive in before Wall Street catches on and these hidden gems hit the mainstream. 💸
Stock #1 — C3.AI ($AI)
What does it do?
C3.AI develops AI applications for large corporations and government entities. They help large companies implement AI without having to build everything from scratch. Their offerings include applications for fraud detection, inventory optimization (so Walmart never runs out of toilet paper during the next apocalypse), predictive maintenance, and tools for custom AI development.
They also offer C3 AI Ex Machina, a business analytics tool; C3 AI CRM for customer management; and C3 AI Defense for military applications.
Moat
C3 is an AI OG with deep industry expertise. They have several pre-built AI solutions for different industry sectors, making it easy for clients to adopt AI and reduce operational costs. They maintain strategic partnerships with Raytheon, AWS, Intel, Google, and Microsoft.
Customers
C3.AI serves large enterprises and major government spenders, including the U.S. Air Force, DARPA, NATO, Shell, Baker Hughes, and Koch. The top three clients account for 35% of revenue.
Financials
- Market Cap: $4.25 billion
- Revenue: $346 million
- Net income: -$279 million (not yet profitable)
- The company has almost no debt
- 1-year stock performance: +3%
Stock #2 — BigBear.AI ($BBAI)
What does it do?
BigBear.AI creates AI decision-making solutions, focusing on defense, intelligence, and commercial sectors. Their platform helps organizations with predictive analytics, data engineering, and AI planning.
Like Palantir, they specialize in turning complex data into actionable intelligence, particularly for military operations, supply chain optimization, and autonomous systems.
Moat
Their moat comes from deep relationships within the defense sector and specialized knowledge of government/military requirements — expertise that’s hard to acquire. They possess security clearances and compliance certifications that create significant barriers to entry for competitors.
Oh, and they only hire kids who hack into the Pentagon. 👀
Customers
BigBear.AI primarily serves U.S. defense and intelligence agencies, including the U.S. Army, Navy, and Air Force. While their commercial customer base is growing, it remains smaller. Similar to C3.AI, they have high customer concentration, with their top clients being primarily government agencies.
Financials
- Market Cap: $2.27 billion
- Revenue: $155 million
- Net income: -$60 million (not yet profitable)
- The company carries significant debt
- 1-year stock performance: +61%
Stock #3 — Cognyte Software ($CGNT)
What does it do?
Remember the movie Minority Report with Tom Cruise? Cognyte is like that precrime unit. They develop AI security analytics software that helps clients detect, predict, and neutralize security threats. Their platform processes massive amounts of data from different sources to identify patterns and security risks for faster response to threats and risks.
Moat
Cognyte’s competitive advantage lies in its sophisticated AI algorithms and deep security intelligence expertise, developed through years of collaboration with government agencies.
The combination of high switching costs for customers and established relationships with government entities creates substantial barriers to entry for competitors.
Customers
Their primary clients include government agencies, law enforcement organizations, and large enterprises across 100+ countries. Notable clients include police forces in Singapore, Brazil, Thailand, the Philippines, Indonesia, and Malaysia.
Financials
- Market Cap: $743 million
- Revenue: $313 million
- Net income: -$15 million (not yet profitable)
- Debt to asset ratio: 50%
- 1-year stock performance: +23%
Stock #4—Verint Systems ($VRNT)
What does it do?
Verint Systems specializes in workforce optimization, customer analytics, automation solutions, and cybersecurity intelligence. They help organizations analyze customer interactions and optimize customer experience through AI-powered tools and cyber intelligence.
Since spinning off Cognyte in 2021, they’ve focused primarily on customer experience and engagement technology.
Moat
They’re like Black Mirror for customer service. Their significant moat comes from their long-standing presence in the customer engagement market and a vast dataset of customer interactions that trains their AI solutions.
Verint’s deep integration with major cloud providers adds another layer of strength. However, they face increasing competition from cloud-native startups and tech giants like Salesforce and Microsoft.
Customers
Verint serves primarily large enterprises, including over 85% of the Fortune 100 companies, with particular strength in financial services, healthcare, telecommunications, and retail sectors.
In the government and military sectors, their clients include the U.S. Department of Homeland Security, NATO, and various police departments.
Financials
- Market Cap: $1.6 billion
- Revenue: $910 million
- Net income: $38 million (profitable)
- Debt to asset ratio: 41%
- 1-year stock performance: -21%
🎁 BONUS Stock — Snowflake ($SNOW)
What does it do?
Snowflake is a cloud provider and data platform specializing in data storage, processing, and analytic solutions. They are the data overlords!
They offer data warehousing, data lakes, data engineering, data science, data application development, and secure data sharing capabilities all in one platform. And as you know, AI needs tons of data!
Note that I’ve been a Snowflake investor for years.
Moat
Snowflake’s moat comes from its unique architecture that enables true multi-cloud data sharing and unlimited scalability. Their platform benefits from strong network effects through their Data Cloud.
The platform’s ability to handle multiple workloads within a single solution, combined with competitive pricing, creates substantial customer lock-in. Their strategic partnerships with major cloud providers further strengthen their market position.
Customers
Snowflake serves over 8,000 customers, including 590+ of the Forbes Global 2000, with a particularly strong presence in the financial services, healthcare, technology, and retail sectors.
Major enterprises like Capital One, Goldman Sachs, Adobe, and DocuSign rely on their platform.
They maintain an impressive net revenue retention rate above 170%, though customer acquisition costs remain high. Profitability? “We’ll fix it in the next update.” 🔥
Financials
- Market Cap: $62 billion
- Revenue: $2.8 billion
- Net income: -$800 million (not yet profitable)
- Debt to asset ratio: 31%
- 1-year stock performance: -25%
Conclusion — Are These Hidden Gems Going to Succeed?
These companies are all trailblazers in the AI field, each representing risky bets with potentially high returns.
I like this kind of asymmetric bet: high risk, high reward. If I wanted safer options, I’d invest in traditional sectors like McDonalds or General Motors.
BigBear.AI shows explosive upside (+308% in a year) and deep ties to defense, but high debt raises red flags. On the other hand, C3.AI, with its strong partnerships and niche expertise, is a safer bet despite its cash burn. So, among all these companies, I’d probably go for C3.AI.
If you want to stay ahead of the curve, join my Be Limitless community — where I share exclusive insights, investment strategies, and hidden gems.
Quick note: I’m just sharing my journey — not financial advice! 😊
— Henrique Centieiro 🕺🏻
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