Innodata Inc. (INOD): A Bull Case Theory 

We came across a bullish thesis on Innodata Inc. on Value investing subreddit by mjblank2. In this article, we will summarize the bulls’ thesis on INOD. Innodata Inc.’s share was trading at $55.84 as of January 28th. INOD’s trailing and forward P/E were 55.30 and 41.15 respectively according to Yahoo Finance.

Innodata, Inc. (INOD) is a key player in the AI infrastructure ecosystem, providing essential data engineering services, including data annotation, preparation, and RLHF (Reinforcement Learning from Human Feedback), which are critical for ensuring sophisticated AI models perform safely and accurately. The company supports five of the Magnificent Seven, highlighting its integral role in AI development, and recently reported record Q3 2025 revenue of $62.6 million, a 20% year-over-year increase, alongside EPS of $0.24, well above estimates.

Management is projecting over 45% growth in 2025, with transformative expansion anticipated in 2026, driven by pre-training data programs and the launch of Innodata Federal, which has already secured an initial $25 million government project, opening a substantial new TAM and diversifying revenue. Despite these growth drivers, INOD is a high-valuation, volatile stock, trading at a forward P/E of around 50x and carrying customer concentration risks, as much of its revenue depends on a few large tech clients. A shift in strategy by any of these clients could significantly impact the business.

Nevertheless, the company’s deep embedding with leading AI players, its critical infrastructure role, and its strong growth trajectory underscore its strategic importance in the AI boom. Even with inherent risks, INOD offers a compelling long-term investment opportunity, as the demand for high-quality, human-driven data engineering continues to accelerate, making it a foundational enabler for the next generation of AI applications. Investors who focus on the long-term AI infrastructure theme may view INOD’s current positioning as a rare chance to gain exposure to a high-value, rapidly growing segment of the AI ecosystem.

Previously, we covered a bullish thesis on Cognizant Technology Solutions Corporation (CTSH) by Magnus Ofstad in May 2025, which highlighted the company’s strong Q1 2025 revenue growth, AI-led productivity strategy, Neuro® AI platform, and strategic partnerships with NVIDIA, Microsoft, and Google. The company’s stock price has appreciated by approximately 7.20% since our coverage. This is because the thesis played out. The thesis still stands as CTSH continues to drive AI-led transformation. Magnus Ofstad shares a similar perspective but emphasizes the continued execution and traction of the AI initiatives.

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Disclosure: None.