The artificial intelligence (AI) frenzy remains intact as the AI infrastructure space remains rock solid, supported by an extremely bullish demand scenario. U.S. stock markets maintained their northward journey in 2026 after an astonishing rally over the past three years. The strong performance was primarily driven by a rejuvenated AI trade.
Here, we have identified three mid-cap AI-infrastructure stocks that are currently trading at more than a 45% discount to their 52-week high prices. Moreover, these stocks have significant price upside potential in the short term.
These stocks are: Innodata Inc. INOD, Calix Inc. CALX and Applied Optoelectronics Inc. AAOI. Each of these stocks currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The chart below shows the price performance of these three stocks in the past month.
Image Source: Zacks Investment Research
Innodata Inc.
Innodata is benefiting from strong AI data-engineering demand, reusable datasets, high-value pre-training work and expanding opportunities in agentic AI, model evaluation and physical AI. INOD appears to be entering a stronger phase of AI-driven expansion, supported by accelerating customer adoption, improving profitability and a widening set of growth opportunities. The growth story is shifting toward higher-value services.
Growing Structural AI Demand
Innodata specializes in finding, cleaning, prepping, and labeling messy data so that generative, agentic, and physical AI models can mine and model it. Sometimes this even involves creating new synthetic data. Beyond supplying training data, INOD provides reasoning datasets, trust and safety services, model evaluation, agent optimization and physical AI support.
INOD continues to focus on building a stronger delivery framework that supports rising project volume and new customer engagements across major technology clients. By scaling its global operations and enhancing technical delivery, it intends to manage increasing demand for complex data and AI integration projects. It will enable the company to maintain a competitive edge in the fast-evolving AI services market.
One of the most promising aspects of INOD’s strategy is its successful customer diversification efforts. On Jan. 29, 2026, INOD entered into a partnership with Palantir Technologies Inc. PLTR to provide data engineering and annotation capabilities to support PLTR’s expanding AI platform deployments for event analytics.
Innodata has an expected revenue and earnings growth rate of 42.1% and 28.3%, respectively, for the current year. The stock is currently trading at a 50.4% discount to its 52-week high price.
Massive Price Upside Potential
The short-term average price target of brokerage firms represents an increase of 99.3% from the last closing price of $62.04. The brokerage target price is currently in the range of $111-$140. This indicates a maximum upside of 125.7% and no downside.
Calix Inc.
Calix continues to broaden its customer relationships by offering integrated broadband, cloud, managed-service and operational solutions through a unified platform. The company added 14 customers during the second quarter of 2026.
AI Platform Expansion
Calix continues to expand the capabilities of its AI-native Calix One platform across residential, business and MDU markets. CALX recently introduced standards-based 50G-PON support and expanded its Wi-Fi 7 portfolio, enabling providers to scale bandwidth-intensive services without rebuilding existing fiber networks.
These additions strengthen CALX’s ability to participate in future broadband upgrade cycles while increasing platform relevance inside customer operations. Management continues to position the platform around integrated cloud management, AI-driven automation and subscriber monetization, which supports deeper customer adoption and larger long-term software opportunities.
CALX continues to build a larger recurring revenue base through cloud, software and managed services offerings. Remaining performance obligations reached $386.4 million in the second quarter of 2026. Management expects AI- driven services and agentic capabilities to contribute more meaningfully during the second half of 2026 and beyond.
New offerings such as HomeOfficeIQ, SmartMDU and expanded Wi-Fi 7 solutions increase opportunities to grow average revenue per subscriber and improve customer retention for service providers. As customers consolidate network management, subscriber engagement and AI-driven operational tools onto a single platform, CALX gains additional opportunities for software expansion and longer-term recurring revenue growth.
Calix has an expected revenue and earnings growth rate of 19.3% and 28.9%, respectively, for the current year. The stock is currently trading at a 47.7% discount to its 52-week high price.
Huge Price Upside Potential
The short-term average price target of brokerage firms represents an increase of 67.4% from the last closing price of $37.24. The brokerage target price is currently in the range of $52-$85. This indicates a maximum upside of 128.2% and no downside.
Applied Optoelectronics Inc.
Applied Optoelectronics is benefiting from an AI-driven optical upgrade cycle as 800G shipments scale, 1.6T products move toward volume production, and CATV demand broadens. The vertically integrated firm designs and manufactures fiber-optic networking products for Internet data centers, cable television, telecommunications and fiber-to-the-home end markets.
High-Speed Optics Ramp
AAOI’s 800G revenue reached $12.8 million in the second quarter of 2026, or 11.9% of data center revenue, increasing more than tenfold year over year and more than doubling sequentially. Management expects 800G revenues to grow nearly fivefold sequentially in the third quarter as added capacity supports higher shipments.
AAOI has more than $200 million of 1.6T orders in hand, and management expects forecast demand for 800G and 1.6T to exceed production capacity through mid-2027, supporting a multi-period product transition.
AAOI’s 800G and 1.6T manufacturing capacity approached 200,000 units per month in the second quarter of 2026, up from nearly 100,000 at the end of the first quarter. AAOI targets more than 650,000 units per month by year-end 2026 and more than 930,000 by year-end 2027, with more than half of 2027 output expected from Texas.
Applied Optoelectronics has an expected revenue and earnings growth rate of more than 100%, each, for the current year. The stock is currently trading at a 53.1% discount to its 52-week high price.
Robust Price Upside Potential
The short-term average price target of brokerage firms represents an increase of 49% from the last closing price of $109.64. The brokerage target price is currently in the range of $109-$220. This indicates a maximum upside of 110% and no downside.
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Calix, Inc (CALX): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).