This Stock Trades Under $5. Analysts See It More Than Doubling.

It is one of the biggest [music] problems in the  AI infrastructure buildout and this tiny company   has found one of the best and cheapest solutions.  Joining us today is market beat analyst Thomas   Hughes with a look at one small company that  is really starting to emerge as a top growth   story in the AI infrastructure buildout. We're  going to really dive into this stock in this   video and three particular catalysts coming  for this tiny tiny stock and why it could be   one of the next big growth stories in the  market for 2026 and into 2027. So Thomas,   first let's start out with the problem and that  is this AI infrastructure buildout and many people   know there's energy as a problem. There is water  as a problem. That's why there's so many concerns   about data centers being built in different  communities. Which area does this company help   to address? This company addresses several of  the structural challenges involved uh with heat   and with maintaining the systems that they help  uh dissipate the heat and and cool the systems,   control the climate around the systems so that  they uh don't corrode and are able to last for   as long as possible which really is super duper  important given how expensive they are and the   expectation for their upgrade cycle to be in half  compared to traditional GPU architecture. Now,   let's talk about some other stocks that have  helped to kind of address that same problem   in different ways. Uh, the first that comes  to mind is Verdive. This is a stock we were   talking about over a year ago as a really  key player that was going to see a ton of   growth in the AI buildout story because it  helped to solve that cooling solution. And   that stock is up more than 133% in the last  year. It's up over a,000% in 5 years. So,   a tremendous growth story for a company like  this. What are some others you can think of of   other stories where a company comes into this  AI buildout story and really takes off because   of the demand once these data center builders  realize how valuable the solution is? Oh, well,   Credto Technologies is one that really stands out.  This is a different uh segment of the AI buildout,   but their active electric cables have proven to  be coste effective and fast for transferring data.   They're being used extensively throughout the data  center buildout and this company's stock price and   its revenue outlook is really reflecting  uh its importance to the ecosystem. Yeah,   Credo is another great example. This stock is also  up over a 100% in a year and that is even after   the pullbacks that we're seeing in a lot of the AI  sector in the last week or two. The stock dropped   about 20% last week and I know Verdiv was down  last week as well as that AI story continued. But   I think that that is why it's such an interesting  time to be looking at this name and looking at the   whole AI infrastructure story because there's a  ton of potential here. And I I think with this   small company that we're getting to, the price  is less than $5 and yet uh the growth story   potential is there and you can see it in some of  these other companies that have helped to solve   uh some kind of bottleneck in the AI buildout and  how well they've performed. And that's why I'm   really excited to share this name with our viewers  today. If you're looking for other names in that   AI infrastructure buildout, I also want you to  check out this special report. It's 10 stocks   powering the AI buildout. You can scan the QR code  or get the link in the description to get that   free report right now on MarketBeat. Normally,  these special reports on Market Beat cost $30,   but because you are watching our YouTube channel  and supporting us, you can access this premium   report for free. It has a ton of names that are  very interesting right now because of the pullback   that we've seen the last couple of weeks in some  of these names. So, make sure to take advantage of   that free special report today by scanning the QR  code or clicking the link. Thomas, let's get into   this stock. What company are we talking about  and then we are going to cover three specific   catalysts that are coming for this company that  could really help see some tremendous growth.   Right. So I think it was really interesting that  you brought up Verdive um as a comparison because   this company's product meshes well with Verive  and can actually be connected to their system.   So together to me these are a handinhand growth  story and this is AirJuel. AirJuel is developing   a new way of uh extracting water from air. It  provides a cost-effective solution compared   to traditional methods of of doing this.  And it is set up to become an AI enabler.   It's set up to become that, but right now it is  still very small. We're talking about a company   around $270 million market cap and and the stock  story has some interesting history that we're   going to dive into too. But first, I want to talk  about if they have a product that works so well,   why haven't they seen that tremendous growth yet  like companies like Verdiff? Well, they're still a   startup. They're in the commercialization phase  right now. They've recently announced a major   catalyst which was the design lockin for their  Prime system. The prime system is their industrial   size system that produces water from air using  excess heat from data centers. That water is   ultra pure. It's good for drinking. It's also good  for putting into your water cooled system. So this   this system uh provides two two forms of utility  by one extracting heat that exists and then   providing the water for Verd's cooling system.  Uh so really to me it's it's very important very   critical for the AI buildout. Yeah, this is a name  that some investors may have heard of already even   though it is so small and that's because there  was a lot of excitement for this name back in   October. We saw a huge spike in October that  basically doubled the stock price and now it's   trading at about half of that right now. Can you  talk a little bit about that price action and was   there just a lot of excitement from the market in  October and has that hype kind of died away? Has   this company not really proven its growth story  yet during earnings reports? what's going on with   the the chart action before we get into those  three big catalysts. Well, that's you know just   the market uh you know getting a grip on what the  story is and seeing like what the potential is and   getting excited about that and then realizing the  reality of oh they're not commercial yet but there   are catalysts ahead. So I see the stock price  recovering you know pretty quickly but it has   been on quite the downtrend and it really fits the  story with uh some of the other AI stories that we   have covered in just the last few days. I know you  and I were recently on talking about memory stocks   and those were all in a downtrend last week too.  Why do you think we're seeing this AI downtrend   right now uh leading into earning season? Well,  it's the the between season period when there's   just not a lot of news for the market to to have  to keep them interested. there's still concerns   and risk because it is a pre-revenue company and  we're waiting for the next catalyst. What is the   first catalyst you're watching that could really  move the stock price? Well, the first uh catalyst   will be the initial commercial launch of Prime  Systems. Those are expected uh later this year.   Um as I said, they've locked in their design, so  they're on track to to produce systems. Uh we're   now just waiting for some OEM uh contracts  to come in uh to put us on track for for for   commercial deployments. going commercial yet  this year is a really a near-term catalyst,   but have we seen any delays or is there something  that could delay that launch or is the company   feeling pretty confident about a 2026 commercial  launch yet? We do feel confident about the launch,   but there's always execution risk, right? So,  like the the biggest near-term risk execution   delay is waiting for their underwriters laboratory  certification. That's just a certification that   says their product is safe to be used. uh once it  gets that certification that will open the door   to their commercial contracts uh and I expect to  see them start to come in pretty soon. Yeah. Talk   about the timing for investors to be looking  at this name right now this week ahead of this   catalyst and the next two that we're going to talk  about as well. I think sometimes when investors   look at a chart that has a lot of volatility  that uh a company that has yet to prove uh it's   profitable yet or even has a product that's super  marketable can be wary. It's definitely a risk and   so I want you to talk about that too. But I also  want you to talk about why you like looking at   companies like this before a major commercial  launch. Mostly because they're cheap. Um, and   this one has got a viable product. Uh, so there's  risk and execution, there's risk and disruption,   but they've got proven technology that provides  utility. So for me, it's just a matter of time.   Um, there's going to be volatility between then  and now. Um, as far as the stock price now,   it's trading in a range down in in the low single  digits. uh but you know provided contracts and   starts making revenue the stock price could shoot  back up to the the mid- teens where it was last   year which is when the market was pricing in  all the potential when we start seeing that   potential be confirmed and reconfirmed then the  price action will start moving even higher. Yeah   I'm having a little dja vu right now Thomas and it  reminds me so much of the AMD story that you and   I have talked about so much over the last couple  of years. you were recommending AMD when it was on   a huge downfall almost two years ago and people  were calling it, you know, portfolio destroyer.   People were losing tons of money on AMD and you  kept saying something very similar and that is   that they have a new product that's coming out  that's going to make them very competitive. When   that product comes out, this company is going to  see a turnaround. And I feel like exactly what you   said played out in AMD's stock price this year.  And so it does give me a little bit of deja vu   uh to the conversation we had for almost a year  about AMD. Do you think that's a good comparison?   Um I I think it is. It's a it's a fine comparison.  Uh we're certainly looking at um the realization   of of um of strategy. They've got a product.  They're on track. Um we know that it's useful.   Um it's just a matter of time for it to gain  traction. And I I see that happening this year.   All right. Let's talk about that second catalyst  that you're watching for AirJuel. Well, the second   catalyst will be the ramping up of production.  So, once they start uh cementing sales and we   get the company in traction, then the ramping  up production and the ramping up of sales will   help to accelerate uh the stock price rally that  will ensue. Um that should happen over the course   of the next year. Um the way that data centers  are being built out, the need for heat control,   the need for water. Um I I just don't see this  company not experiencing really robust demand.   Yeah, there has to be proof in the product though  as far as testing goes and regulations. Has there   been all of that done so far? I'm really getting  that execution risk here and just wondering do we   know if the product works well and are we fairly  confident that once it does launch uh there is   going to be an uptick in demand? Uh yeah, the  uh the products are being validated right now.   There's some third-party validation going on at  Arizona State University and the AirJuel Prime   is being sent to the net zero innovation hub for  data centers in the EU where it will be set up as   a demonstration model for hyperscalers to come and  check it out and see how it works. I think it's a   great point too. It's a it's an international  company. The data center buildout isn't just   happening in the US even though we are seeing  tons of it. This is happening all over the world.   So the demand for what they're building and once  they can prove that what they are building works   well and is cheaper than some of the other options  out there. I think that uh that's when you'll   actually see the growth story there. So let's talk  about that a little bit. I we haven't dove into   why this is maybe a more affordable option than  some of the other solutions to this data center   bottleneck. All right. So uh for climate control  and for generating moisture from air mechanically   it is cheaper to operate than traditional uh  compressorbased um air conditioning units.   Uh so it provides a lot of utility. Uh there is  some concern from the short sellers who say that   uh you know they're looking at it from the  water purification standpoint that it's much   more expensive than desalination tech techniques  and that's absolutely true. But I want to point   out that desalination has got nothing to do with  data centers or AI. Data centers aren't worried   about saltwater. They just need to have some  fresh water. And so AirJul makes fresh water   and they control humidity. Desalamation does not  control humidity. So those two stories are really   not connected at all. I think that the short  settlements really have that story wrong and   that the long-term application for this product  really is going to be in data centers but also in   other industries that require fresh water but also  climate control which is really really important.   A good argument for why this is still affordable.  But let's talk about that third catalyst. I know   there's another one that you're watching that  could move the stock price in the near future.   Well, right, the the the third catalyst is the  launch of the AirJuel core system. The core system   is a smaller unit. It comes in two different  uh configurations. One specifically for climate   control and dehumidification and one specifically  for for for water generation. But these units are   designed for smaller industrial applications,  but also for co-located water generation. We're   looking at it for defense applications for  uh being deployed near um like schools or   for neighborhoods which also need to have clean  water. So, this is just another long-term driver   for the stock, a catalyst for revenue and for  earnings over the long term. Well, it's clear   that analysts are also taking all of those  catalysts into account because if you look at   uh what the analysts are saying for price targets  on this very small company, I think that's where   investors can get excited, too. Again, there's so  many different theories out there about whether   you should pay attention to analysts or not. and  analysts have been late for so many of these AI   growth stories in the last couple of years that  some investors just don't pay attention. But I I   think it's interesting to look at the most recent  price target from an analyst in May saying this   stock could be worth $12. A consensus right now  is around eight. Uh there are some lower ones,   but six is the lowest price target on this  name. And so what does that tell you, Thomas,   when you see the kind of price targets we're  getting on this small stock? Um it to me it   kind of reaffirms the potential here. It's still  a high-risisk stock, but with the market trading   um you know below the analyst lowest target,  it tells me the market's disconnected from what   the opportunity is. And when we start seeing  some catalyst emerge, we should start seeing   this the price action respond favorably. Uh  get back up above this critical resistance   levels in the $450 to $5 range and start moving  up towards that consensus level around $8. Now,   for those investors who are familiar with this  name, I want to get back all the way to the IPO   story from a couple of years ago. Um, I think  that investors who maybe got in around then   have not loved this name. It's probably not been  a great performer just looking at the chart for   people who were in very very early on air. Juel,  let's talk about that IPO story and and if the   the chart action at IPO seems pretty similar to  other IPO stories that you've seen in the past,   Thomas. To me, it it does. uh the market  priced in an opportunity, the IPO happened,   and the reality is it was a pre-revenue company  with years until commercialization. So, the   stock price sold off. Uh the selloff has been, you  know, pretty big. It's in the triple digit range,   but it's not as big as it could have been. The  stock has uh got support well above the $1 region,   so it, you know, it shows pretty good support. And  since then, we've seen volume really rise. Volume   is underpinning the support in the market today.  Uh that's really a good sign. And it shows that   uh investors are actually buying the stock and  more investors not just the same investors or   hopeful investors but a larger number of investors  that's reflected in the analyst trends and in   the institutional trends. Institutions own a  significant amount of this company which is   uh yeah right around 65% which shows a pretty  high degree of confidence in the outlook. Yes,   the outlook is very strong and like you said uh  when it launched commercialization was still a   couple of years off. Well, now we're talking about  this year for having some commercial products. But   the the next big question that many investors  will have is when could this company actually   be profitable? When you look at the most recent  earnings report, it's clear they're burning money   right now. Um they're spending a lot of money to  again hopefully one day make money. Uh but what do   you think that timeline to actual profitability  could be after these commercial launches this   year? Yeah. So as far as profitability goes, uh  analyst forecast are forecasting profits by 2030,   but I think that's really um an iffy forecast.  I think that it could happen much sooner than   that. Once we have the product of firms with third  party use cases, once we have the UL certification   and commercial availability, I think that the  initial demand orders uh could come in much faster   than what the market is anticipating. um in that  scenario uh the revenue outlook and the earnings   outlooks will be much too low. We'll start seeing  um analysts revising not only their revenue and   earnings targets but also their price targets  which will just be a big bundle of catalyst for   the stock price. Yeah, that 2030 timeline um is is  a long ways out. But I also think it's important   to talk about how long that AI infrastructure  timeline could be. We know the the buildout is   heavily underway right now. really has been  for the last year to almost two years across   the country. But let's talk about the timeline of  how long these data centers could be building and   how much opportunity that could mean for this  company. So the the build is going to last for   a long time. I think that revenue strength will  be really good for the next four to five years   while we're building out so many data centers. Uh  but then the long-term opportunity is also there   because there's so much um cross utility for other  industries. I think that this company really will   uh will emerge as being in critical to industries  across verticals. Um but what the market's really   getting wrong right now with this company is that  it's an AI enabler. Um without the heat control,   without the water, these data centers just  cannot operate. And when it comes to what it   does right now, it appears to be producing the  best product at the cheapest price. Let us know   your thoughts in the comments. Are you excited  to learn about this stock for the first time   and look into it more yourself? Or have you been  burned by the stock already over the last couple   of years? I'd love to hear from both uh opinions  in the comments. And also a reminder, do your own   research on any stock that you hear about. There's  some exciting things here that Thomas highlighted,   but this channel is all about stock ideas.  So make sure you're doing your own research   before buying a stock and adding it to your own  portfolio. If you want to hear more about these   AI infrastructure stories, make sure to watch this  video. We dive into some really great names in the   AI buildout. These are all major bottlenecks  that Keith Kaplan shares with the audience.