5 Mid-Cap AI Infrastructure Stocks to Buy With Deep Discounted Value

The AI infrastructure space recently gathered steam, with the DeepSeek-related fears turning out to be overblown. Moreover, the chances of a trade deal between the United States and its major trading partners, the Fed’s indication of two rate cuts of 25 basis points each this year and the evaporation of recession worries in the U.S. economy have boosted market participants confidence.

Here we recommend five mid-cap AI infrastructure stocks for investment. These stocks have outperformed the broad-market index – the S&P 500 – in the past three months. Moreover, each of these stocks offers deep discounted value that should reveal over a long time period. 

Consequently, in the long term, these stocks have the potential to become large caps. At this stage, it should be prudent to invest in these stocks at a lucrative valuation. Five such stocks are: UiPath Inc. PATH, Five9 Inc. FIVN, C3.ai Inc. AI, Qualys Inc. QLYS and Fastly Inc. FSLY. Each of our picks carries either a Zacks Rank #1 (Strong Buy) to 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

AI Frenzy Flourishing

The AI space remains rock solid supported by an extremely bullish demand scenario. Four of the “magnificent 7” stocks have decided to invest a massive $325 billion in 2025 as capital expenditure for AI-infrastructure development. This marks a significant 46% year-over-year increase in capital spending on the AI ecosystem. 

This huge spending on AI infrastructure will dramatically change the world over the next five years in fields like hyperscale automation, robotics, healthcare, energy, materials, financials and cybersecurity. Research firm Oppenheimer estimated that the total addressable global sovereign AI market could be a massive $1.5 trillion.

The chart below shows the price performance of our five picks in the past three months.

UiPath Inc.

Zacks Rank #1 UiPath provides an end-to-end automation platform that offers a range of robotic process automation solutions primarily in the United States, Romania, the United Kingdom, the Netherlands, and internationally. PATH offers a suite of interrelated software to build, manage, run, engage, measure, and govern automation within the organization. 

The PATH platform's embedded AI (artificial intelligence), ML (machine language), and NLP (Natural Language Processing) capabilities improve decisioning and information processing. PATH introduced new generative AI features, including specialized LLMs (Large Language Model) such as DocPATH and CommPATH, and Context Grounding, to enhance automated AI models for specific business needs.

UiPath has an expected revenue and earnings growth rate of 8.5% and 5.7%, respectively, for the current year (ending January 2026). The Zacks Consensus Estimate for current-year earnings has improved 1.8% over the last 30 days. UiPath has a P/E ratio of 23.9X compared with 29.7X of the industry.

Five9 Inc.

Zacks Rank #1 Five9 provides intelligent cloud software for contact centers in the United States, India, and internationally. FIVN offers a virtual contact center cloud platform that delivers a suite of applications, enabling a broad range of contact center-related customer service, sales, and marketing functions. 

FIVN’s platform comprises interactive virtual agents, agent assistance, workflow automation, workforce engagement management, AI insights, and AI summaries. It allows the management and optimization of customer interactions across voice, chat, email, web, social media, and mobile channels directly or through its application programming interfaces.

FIVN has been benefiting from the growing adoption of AI tools in its call center services, with personalized AI agents emerging as a major growth driver. On Feb. 19, Five9 introduced its Intelligent CX Platform powered by Five9 Genius AI on the Google Cloud space. FIVN also released new Five9 AI agents tailor-made for Google Cloud.  

Five9 has an expected revenue and earnings growth rate of 9.6% and 11.7%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.7% over the last 60 days. Five9 has a P/E ratio of 10.1X compared with 29.7X of the industry.

C3.ai Inc.

Zacks Rank#2 C3.ai in the AI automation sector specializes in enterprise AI applications, including predictive maintenance and generative AI tools. C3.ai has positioned itself as a pure-play enterprise AI software company. Central to the company’s growth strategy is its deepening alignment with major cloud providers and government institutions.

While the broader infrastructure buildout continues to attract headlines and capital, C3.ai’s thesis is that enterprise value accrues not at the hardware or model level, but where actionable AI is deployed. As enterprises seek production-ready solutions atop robust infrastructure, C3.ai’s differentiated platform could see a long-awaited lift.

Five9 has an expected revenue and earnings growth rate of 20.1% and 9.8%, respectively, for the current year (ending April 2026). The Zacks Consensus Estimate for current-year earnings has improved 19.6% over the last 60 days. C3.ai is yet to generate profit while the industry has a P/E of 20.2X.

Qualys Inc.

Zacks Rank #1 Qualys is benefiting from the increasing demand for cloud-based cybersecurity solutions amid growing cyber threats and digital transformation initiatives. With a diverse customer base that includes enterprises, SMBs and government entities, QLYS maintains a balanced customer mix, which keeps it resilient against fluctuations in IT spending. 

Two major AI-powered solutions of QLYS include TotalAppSec, a unified application risk management platform for web applications and APIs, and TotalAI, focusing on AI and large language model (LLM) workloads. 

Qualys' strategic acquisitions are pivotal in driving its growth trajectory. Since its inception, the company has acquired seven companies, of which Blue Hexagon was acquired in November 2022. Blue Hexagon's AI/ML (machine language) capabilities enhanced QLYS’ threat detection and response solutions, bolstering its cybersecurity offerings.

Qualys has expected revenue and earnings growth rates of 7.3% and 0.7%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 7.7% over the last 60 days. Qualys has a P/E ratio of 8.8X compared with 11.6X of the industry.

Fastly Inc.

Zacks Rank #2 Fastly provides infrastructure software offering cloud computing, image optimization, security, edge computer technology and streaming solutions. On Dec.16, 2024, FSLY unveiled Fastly AI Accelerator, a semantic caching solution that allows developers to optimize their LLM generative AI applications.

FSLY operates an edge cloud platform for processing, serving, and securing its customers’ applications in the United States, the Asia Pacific, Europe, and internationally. FSLY’s Edge Cloud Platform offers more efficient performance as developers need only a single line of code instead of repeated calls to the AI provider to update their application to a new API endpoint. 

Fastly has an expected revenue and earnings growth rate of 8.6% and 25%, respectively, for 2025. The Zacks Consensus Estimate for 2025 earnings has improved 10% over the last 30 days. Fastly is yet to generate profit while the industry has a P/E of 29.7X.

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This article originally published on Zacks Investment Research (zacks.com).

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