The momentum of the artificial intelligence (AI) infrastructure segment is likely to continue in 2026. The AI space remains rock solid supported by an extremely bullish demand scenario. A section of financial experts and analysts is concerned about the highly overstretched valuation of AI bigwigs — both infrastructure developers and application implementers. 

However, a microscopic analysis has revealed that several small and mid-sized AI stocks that underperformed the broader market in the past year, could become game changers in 2026. Five such stocks are: UiPath Inc. (PATH Quick QuotePATH - Free Report) , Five9 Inc. (FIVN Quick QuoteFIVN - Free Report) , Qualys Inc. (QLYS Quick QuoteQLYS - Free Report) , Teradata Corp. (TDC Quick QuoteTDC - Free Report) and BlackBerry Ltd. (BB Quick QuoteBB - Free Report) . Each of our picks currently carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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

Image Source: Zacks Investment Research

UiPath Inc.

Zacks Rank #1 UiPath provides a robotic process automation platform that uses AI to automate repetitive tasks and streamline operations. 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, 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.

PATH is also emerging as a key enabler of the agentic AI trend. Its platform now spans automation, orchestration, and generative AI integration, positioning it well as enterprises look to blend AI and automation at scale. UiPath continues to expand strategic relationships with major players, such as Microsoft Corp. (MSFT), NVIDIA Corp. (NVDA), Snowflake Inc. (SNOW), SAP SE (SAP) and Deloitte.

PATH has an expected revenue and earnings growth rate of 9.3% and 13.7%, respectively, for the next year (ending January 2027). The Zacks Consensus Estimate for next year’s earnings has improved 5.6% over the last 30 days.

Five9 Inc.

Zacks Rank #2 contact center software solutions provider Five9 has been benefiting from FIVN’s strong performance, which was driven by a rise in subscription revenues supported by traction in Enterprise AI revenues. FIVN 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. Five9 introduced its Intelligent CX Platform powered by Five9 Genius AI on the Google Cloud. FIVN also released new Five9 AI agents tailor-made for Google Cloud.  

Ties with big names like Salesforce Inc. (CRM), Microsoft, ServiceNow Inc. (NOW), Verint Systems Inc. (VRNT) and Alphabet helped the company build more tailored AI tools and improve its integration across platforms. This is anticipated to have helped FIVN win new clients and hold on to the existing ones.

Five9 has an expected revenue and earnings growth rate of 9.5% and 8.3%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 1.3% over the last 60 days.

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. 

Qualys' strategic acquisitions are pivotal in driving its growth trajectory. Since its inception, the company has acquired seven companies, of which Blue Hexagon, Total Cloud and Spell Security are the most notable ones. Acquired in November 2022, Blue Hexagon's AI/ML capabilities enhanced Qualys' threat detection and response solutions, bolstering its cybersecurity offerings. 

Two major AI-powered solutions of QLYS include TotalAppSec, a unified application risk management platform for web applications and APIs, and TotalAI, which focuses on AI and LLM workloads. 

QLYS’ continuous innovation and focus on expanding product capabilities position it well to navigate market challenges and sustain long-term growth despite potential macroeconomic disruptions. A continuous increase in Vulnerability Management, Detection and Response to customer penetration is an upside.

Qualys serves a long list of global enterprises like Accenture plc (ACN), International Business Machine Corp. (IBM), Cognizant Technology Solutions Corp. (CTSH), Infosys Ltd. (INFY), Humana Inc. (HUM) and Sodexo.

Qualys has expected revenue and earnings growth rates of 7.7% and 6.5%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 10.4% over the last 60 days. 

Teradata Corp.

Zacks Rank #1 Teradata’s prospects are expected to benefit from an improvement in ARR growth rate, cost savings, and productivity measures. These factors are expected to drive meaningful free cash flow. Growing workloads on data platforms due to Agentic AI’s 24/7, always-on query potential bodes well for TDC’s prospects as it not only manages the critical enterprise data that powers these AI systems but is also well positioned to deliver the performance required by these AI systems. 

TDC believes that it offers the best autonomous AI and knowledge platform for Agentic workloads at the best price performance, whether on-premises or in the cloud. An innovative portfolio that includes QueryGrid data analytics fabric, Enterprise Vector Store, AgentBuilder, and ClearScape Analytics with unified ModelOps capabilities is expected to drive top-line growth.

Acquisitions, such as Stemma, enhance Teradata’s capabilities in data search and exploration, providing added value to its analytics offerings. TDC has introduced innovative AI capabilities like ask.ai, which are designed to simplify natural language interactions. 

TDC has also introduced enhanced ModelOps features in ClearScape Analytics, aiming to provide no-code functionalities that empower customers to expand AI rapidly and advanced analytics while ensuring compliance with enterprise governance standards. 

New product rollouts like Enterprise Vector Store bring vector-based processing to the core analytics layer, enabling Retrieval-Augmented Generation and Agentic AI capabilities for real-time decisions. These developments are expected to drive TDC’s clientele and top-line growth over the long haul.

Teradata has an expected revenue and earnings growth rate of -0.6% and 3.6%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 8.3% over the last 60 days. 

BlackBerry Ltd.

Zacks Rank #2 BlackBerry provides intelligent security software and services to enterprises and governments around the world. BB uses machine learning and AI to provide cutting-edge solutions for cybersecurity, safety and data privacy. 

BlackBerry is a well-known name in the areas of endpoint security and management, encryption, and embedded systems. The company also serves small and medium-sized businesses, and original equipment manufacturers (OEMs) in automotive, medical, industrial and other core verticals.

BB’s QNX business, formed by rebranding its IoT unit, is gaining from strengthening demand in the automotive segment. As the standard vehicle metamorphoses from a hardware-driven model to a software-defined one, automakers are experiencing the need for increasingly faster processing in a secure environment. 

As a result, the QNX software suite is now installed in more than 275 million on-road vehicles — in both advanced driver assistance systems and digital cockpits — and has recorded design wins at most tier-1 OEMs worldwide. BB has undertaken several initiatives to drive growth in General Embedded markets.

BlackBerry has an expected revenue and earnings growth rate of 7.4% and 13.3%, respectively, for next year (ending February 2027). The Zacks Consensus Estimate for next year’s earnings has improved 6.3% over the last 30 days.