Top 2 Underappreciated SMid Cap AI Plays According to JP Morgan
Investing.com -- Small and mid-cap companies focused on artificial intelligence offer unique investment opportunities that often fly under the radar compared to their large-cap counterparts. JP Morgan has identified two particularly promising yet underappreciated SMid Cap AI plays that deserve investor attention. These companies are leveraging AI technologies in specialized sectors, positioning themselves for significant growth potential while remaining relatively undiscovered by mainstream investors.
Mirion is emerging as a key player in the Small Modular Reactor (SMR) space, with its recent $585 million acquisition of Paragon significantly enhancing its market position. This strategic move doubles Mirion’s SMR revenue potential and expands its nuclear power portfolio to approximately 45% of total revenue. The acquisition broadens Mirion’s customer base to include next-generation SMR developers such as NuScale, Kairos Power, Aalo, and Terra Innovatum.
The company is well-diversified across leading SMR technologies, including HTGR, LWR, MSR, and SCR designs. JP Morgan analysts estimate Mirion has an SMR revenue potential exceeding $1 billion based on current customer partnerships. Management has set a target of achieving 30% adjusted EBITDA margins by 2028, with the Paragon acquisition expected to deliver approximately $10 million in annualized cost synergies by year five and EPS accretion of $0.02-$0.03 by 2026.
Looking ahead, JP Morgan’s analysis projects Mirion’s nuclear revenue could reach approximately $2 billion by 2050, representing a 5.5% CAGR. Their bull case suggests potential revenue of $2.3 billion with a 6% CAGR, while their bear case estimates around $900 million by 2050, representing a 2% CAGR.
Mirion Technologies reported its Q3 2025 results, posting an adjusted EPS of $0.12 which surpassed analyst forecasts. The company’s revenue for the quarter reached $223.1 million, also coming in slightly above expectations.
Valmont Industries is experiencing significant growth in its utility segment, with backlog increasing approximately 20% year-to-date. The company recently secured a $65 million high-voltage project, demonstrating strong market demand. Third-quarter performance showed robust pricing and early volume growth, with demand increasing approximately 12%.
The company has invested $78 million in capital expenditures, which has expanded revenue capacity by $95 million. With plants running near 100% capacity and accelerating backlog growth, Valmont is ramping up investments to meet demand. The company is targeting $350-$400 million in utility growth over the next 3-4 years, which could translate to $3-$5 in EPS.
Valmont plans to invest approximately $100 million in growth capital expenditures in 2025, with an additional $100 million planned for 2026, positioning the company for sustained long-term growth in the utility sector.
In a recent development, Valmont Industries announced Q3 2025 earnings that beat expectations, with an EPS of $4.98, and also raised its full-year 2025 EPS guidance. Following the results, both Stifel and DA Davidson raised their price targets on the company.
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