TipRanks Smart Growth Portfolio #45: Visible Signals
Dear Investors,
Dear Investors,
Welcome to the 45th edition of the Smart Growth Portfolio and Newsletter, where we spotlight a cloud-native telecom intelligence specialist. But first, some news and updates.
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Portfolio News
❖ BWS Financial has upgraded Innodata (INOD) from to “Top Pick” status with a $110 price target, which implies a potential upside of over 70%. Multiple catalysts underpin the target, including partnerships with five of the Magnificent Seven tech giants for AI training data needs. Innodata’s recent $25 million U.S. federal government contract supports sovereign AI deployments, opening global consulting opportunities and new revenue streams. BWS Financial views INOD as a “picks and shovels” leader in AI data engineering. According to McKinsey’s research, the nascent global GenAI services industry will exceed $200 billion by 2029, and BWS analysts believe that INOD is rapidly becoming a leader in this niche.
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❖ B. Riley initiated coverage of Atlanticus (ATLC) with a “Buy” rating and $90 price target, signaling a potential upside of more than 33%. Analysts believe that ATLC has a superior fintech platform and a winning go-to-market strategy targeting underbanked consumers, with this niche having a $1 trillion annual origination potential. Atlanticus’ $6 billion portfolio scale and strong fundamentals reinforce its investment case, with additional upside arriving from recent acquisitions and a more favorable 2026 consumer environment.
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❖ Micron (MU) announced that it will officially break ground on its $100 billion megafab in Onondaga County, New York, on January 16. The event is projected to draw extremely high attention, with White House, Congress, and New York state and local government representatives expected to join. As the only U.S. memory chip maker, Micron positions the megafab to meet surging AI-driven needs, with federal CHIPS Act funding aiding expansion. It supports Micron’s goal to produce 40% of its leading-edge DRAM in the U.S. The megafab’s first production is targeted for 2030 and the full buildout is expected to span 20 years. The facility is planned to eventually include up to four semiconductor fabs producing advanced memory chips for AI and data center demands, marking the largest private investment in New York state history.
Meanwhile, the company continues to enjoy soaring analyst support, with several price-target hikes issued over the past few days alone. These include a significant PT raise from UBS – from $300 to $400 – which still remains below the Street-high $500 target from Rosenblatt Securities. Analysts across the board cite robust AI-driven memory cycle dynamics, with memory shortages notably improving producers’ pricing power. Just recently, Samsung and SK Hynix – which along with Micron make up the power trio in memory chips – are planning to boost production materially this year to capitalize on surging demand and prices. Samsung’s CEO described the shortages in memory chips as “unprecedented,” with industry specialists saying they may persist for months, if not years, as the AI buildout accelerates.
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❖ Applied Digital (APLD) published a blowout fiscal Q2 2026, surging past estimates on all metrics. Revenue surged by 250% year-over-year to $126.6 million, versus the consensus of $85.3 million, while adjusted EPS came in at $0.0 – marking a significant milestone of breaking even in non-GAAP terms – compared to the expectations of minus $0.12. Adjusted EBITDA surged by 230% year-over-year to $20.2 million.
These results were driven by $85 million in HPC hosting revenue, including tenant fit-out services and lease revenue from Applied’s Polaris Forge 1 facility in North Dakota, reflecting continued strong momentum in AI data centers and the company’s tangible progress on long-term contracts. APLD announced a new $5 billion hyperscaler customer for Polaris Forge 2, adding to an existing $11 billion agreement with CoreWeave, which holds 400 MW under contract at Polaris Forge 1.
Moreover, APLD has a massive development pipeline of over 9 gigawatts, with 4.3 gigawatts already under active development, providing a clear runway for growth as AI infrastructure spending accelerates. Advanced discussions are currently underway for an additional 900 MW of capacity across three sites – besides Polaris Forge 1 and 2 – primarily with one additional potential hyperscaler customer. Applied’s multi-billion-dollar contracts and expansion plans are well-supported by its strong balance sheet and robust, non-dilutive financing framework. The company closed a $2.35 billion senior secured notes offering and secured $900 million in preferred equity financing to fund development.
The spinout of Applied Digital Cloud as ChronoScale, a pure-play GPU-optimized AI compute platform, is expected to unlock massive additional value. The new entity, which will be 97% owned by Applied, will target capacity-constrained AI markets, where demand continues accelerating exponentially, by offering dense, reliable GPU compute tailored for training and inference, differentiating from general cloud providers.
Overall, Applied Digital’s FQ2 26 highlighted a major operational inflection point as the company transitions from heavy construction to generating significant lease revenue from its HPC infrastructure. The company is scaling capacity much faster than previously estimated and now has a clear path to 5GW capacity by 2030-2032. Building on this progress, management now expects to surpass its long-term goal of reaching $1 billion in net operating income (NOI) within five years.
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This Week’s Top Growth Pick: RADCOM (RDCM)
RADCOM Ltd. is a provider of cloud-native, AI-driven network intelligence and service assurance solutions built for the next generation of telecom networks. Its software helps mobile operators see, understand, and automate what’s happening inside increasingly complex, virtualized infrastructures. As networks shift toward open architectures, software-defined cores, and real-time service delivery, RADCOM positions itself as the control layer that keeps performance, reliability, and user experience in check. The company operates at the intersection of telecom, cloud, and artificial intelligence – translating massive volumes of network data into actionable insights. With a clear focus on modern mobile networks, RADCOM enables operators to run smarter, more adaptive systems as connectivity demands continue to accelerate.
Source: RADCOM Ltd. Corporate Overview, November 2025
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The Control Shift
RADCOM’s roots go back to Israel’s early telecom innovation wave. Founded in 1991, the company initially built tools for monitoring traditional, hardware-centric telecom networks. It went public on the Nasdaq in the late 1990s, establishing a U.S. market presence while retaining its Israeli engineering core. For much of its earlier life, RADCOM operated as a niche assurance vendor in a market dominated by large, vertically integrated incumbents. That changed as mobile networks began shifting from physical appliances to software-defined architectures.
The past five years mark the most important transformation in RADCOM’s history. As 5G moved from concept to deployment, the company made a deliberate pivot toward fully cloud-native, virtualized network intelligence. Rather than adapting legacy tools, RADCOM rebuilt its platform around microservices,1 containers,2 and Kubernetes-based orchestration.3 This architectural reset aligned the company with how modern mobile cores – the “brains” of the cellular networks – are actually built and operated, positioning RADCOM for long-term relevance as networks became more open, disaggregated,4 and software-driven.
A key proving ground for this shift came through RADCOM’s involvement with Rakuten Symphony, the network technology company formed to commercialize the cloud-native mobile architecture originally built for Rakuten Mobile’s greenfield network in Japan. Working within that ecosystem exposed RADCOM to one of the industry’s most demanding real-world environments – large-scale, software-defined, multi-vendor networks where automation and real-time intelligence are essential, not optional. That experience accelerated platform maturity and raised RADCOM’s visibility among operators exploring open and virtualized network models.
As the platform evolved, ecosystem integration became a central part of the strategy. Rather than tying itself to a single vendor stack, RADCOM positioned its technology to sit across the telecom and cloud landscape. It built deep integrations with major cloud providers including AWS, Google Cloud, and Microsoft Azure, allowing operators to deploy RADCOM’s assurance and analytics natively inside their preferred environments. On the operational side, RADCOM developed tighter product-level integration with ServiceNow, linking service assurance data directly into service management workflows and enabling higher automation and faster issue resolution. The company also aligned itself with core telecom infrastructure players such as Ericsson, integrating into automation and orchestration environments used by large operators. Together, these partnerships reflect a deliberate shift from point solutions toward embedded, platform-level relevance.
RADCOM has also expanded the role of AI across its software stack. What began as analytics-driven assurance evolved into more autonomous, AI-assisted operations, including agentic AI workflows and generative AI interfaces designed to help operators diagnose issues, prioritize actions, and shorten response cycles. Rather than positioning AI as a surface-level feature, RADCOM embedded it into how networks are observed and managed – enabling predictive insights, closed-loop automation, and increasingly self-directed operational behavior. This focus reflects a broader ambition: pushing service assurance closer to real-time decision-making as network complexity outpaces manual control. At the same time, RADCOM began framing its technology roadmap beyond 5G, highlighting concepts such as the path to 6G and support for non-terrestrial networks (NTNs). While these remain forward-looking opportunities rather than current revenue drivers, they signal how the company sees its role evolving as mobile connectivity expands across satellites, edge systems, and software-defined domains.
Today’s RADCOM reflects that transformation. It operates as a global company combining deep telecom heritage with a platform designed for how mobile networks are being rebuilt. The RADCOM of five years ago monitored networks. The RADCOM of today helps operators run them intelligently – and that shift defines the company it has become.
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1 – Microservices are modular, independently managed services – designed and operated as standalone components.
2 – Containers refer to software packaging that allows applications to run consistently across data centers and cloud environments, making network functions faster to deploy, easier to scale, and simpler to automate.
3 – Kubernetes-based orchestration refers to automation software that manages large numbers of containers in real time – allocating resources, scaling capacity, and keeping services running without manual intervention.
4 – Disaggregated networks are network architectures that separate hardware and software from a single vendor stack, allowing operators to mix technologies, reduce lock-in, and adapt networks more flexibly as requirements change.
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Automating Intelligence
RADCOM operates at the core of modern mobile networks, providing cloud-native, AI-driven network intelligence and service assurance software to telecom operators. At the center of its offering is the RADCOM ACE platform, which continuously ingests live network data from 4G and 5G environments and turns it into actionable insight for performance assurance, automation, and customer experience management. In practical terms, RADCOM helps operators understand what is happening inside their networks in real time – and increasingly, act on it automatically.
The company’s business model is software-centric and largely recurring. More than 70% of revenue comes from recurring sources, supported by multi-year agreements with Tier-1 communication service providers, including AT&T, DISH Wireless, Vodafone, and others. RADCOM sells its platform primarily as a subscription, often bundled with long-term deployment contracts tied to network modernization programs such as 5G standalone rollouts or cloud-native core migrations. Professional services exist, but they are largely in support of implementation and expansion rather than a core profit driver, giving the model a SaaS-like profile with strong visibility.
RADCOM’s differentiation starts with architecture. Unlike legacy assurance vendors that retrofitted older tools for virtualized networks, RADCOM rebuilt its platform as a cloud-native system optimized for dynamic scaling, automation, and operation inside modern, software-driven networks. This allows it to operate natively inside public cloud and hybrid environments, scale dynamically, and integrate cleanly into multi-vendor networks. As telecom infrastructure becomes more disaggregated, this architectural flexibility has become a competitive advantage rather than a technical nicety.
The platform has also evolved beyond monitoring and moved into intelligence. RADCOM has embedded artificial intelligence deeply into ACE, including agentic AI workflows and generative AI interfaces that help operators diagnose issues, prioritize actions, and automate responses. New offerings such as its high-capacity user analytics solution – powered by NVIDIA BlueField-3 DPUs – extend this capability into ultra-high-throughput environments, enabling real-time analytics at scale while materially reducing operational costs in field trials. This shift positions RADCOM closer to closed-loop automation, where networks increasingly self-optimize rather than rely on manual intervention.
Partnerships amplify reach and relevance. RADCOM integrates tightly with all major public cloud providers, giving operators deployment flexibility. Its product-level integration with ServiceNow connects service assurance directly into service management workflows, enabling automated ticket resolution and faster root-cause analysis. Alignment with Ericsson’s automation and orchestration ecosystem further embeds RADCOM inside large-scale operator stacks, while the recent multi-year win with 1GLOBAL demonstrates traction in complex, multi-region environments spanning tens of millions of connections.
From a market perspective, RADCOM operates within the automated 5G assurance segment, which management and third-party research estimate at roughly $2.4 billion today, growing at a double-digit pace as operators push toward autonomous networks. RADCOM’s current share remains modest, but its cloud-native design, recurring revenue model, and growing recognition among Tier-1 operators give it clear room to expand penetration as networks become more software-driven.
RADCOM’s growth story is not about chasing volume at any cost – rather, about embedding deeply into how next-generation networks are run: monetizing intelligence, automation, and reliability as telecom operators adapt to 5G, AI-driven operations, and increasingly complex network environments.
Source: RADCOM Ltd. Corporate Overview, November 2025
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Deliberate Signals
RADCOM’s financial profile over the past several quarters reflects a company that has moved beyond turnaround and into a more durable growth phase. Revenue growth remained strong through 2025 as operators continued investing in cloud-native 5G cores and automation. In Q3 2025, revenue reached a record $18.4 million, up 16.2% year over year, marking another quarter of double-digit expansion driven by ongoing customer deployments rather than one-off contract timing.
Execution has also been surpassing expectations. RADCOM has exceeded adjusted EPS expectations in every quarter since analyst coverage began in mid-2021 and has delivered revenue above consensus for at least eight consecutive quarters, the full span of available comparison data. In the most recent quarter, results came in ahead of internal targets and comfortably within management’s forecast framework, reinforcing credibility around guidance.
Profitability has improved alongside growth. Gross margin in Q3 2025 was slightly above 77% on a non-GAAP basis, reflecting a favorable mix and the software-heavy nature of RADCOM’s model. More importantly, operating leverage is now clearly visible. Non-GAAP operating income reached a record $3.8 million in the quarter, representing a 20.9% operating margin, the strongest level in several years. This marks a sharp contrast to earlier phases when growth was accompanied by heavier margin dilution as the company invested in cloud, AI, and go-to-market capabilities. The company clocked in adjusted EPS of $0.29, up roughly 26% year-over-year and notably above the consensus of $0.23.
RADCOM’s path to profitability has been gradual but credible. Non-GAAP profitability was achieved in 2022 and has since strengthened meaningfully. GAAP results have also improved, with consistent positive GAAP net income reported in recent quarters, though management continues to emphasize non-GAAP metrics as the cleaner view of core operating performance. The trend matters more than the classification: margins are expanding, and profitability is no longer episodic.
Cash generation and balance sheet strength further reinforce the picture. Operating cash flow in Q3 2025 was positive at $5.1 million, lifting cash and short-term deposits to $106.7 million at quarter-end. Crucially, RADCOM carries zero debt, giving it unusual financial flexibility for a company of its size. This balance sheet allows continued investment in AI, partnerships, and sales expansion without external financing pressure or dilution risk.
On guidance, RADCOM reaffirmed full-year 2025 revenue growth of 15-18%, implying continued year-over-year expansion from 2024’s base. The company does not provide detailed EPS guidance, but margin commentary reflects unwavering confidence in sustaining non-GAAP profitability. Importantly, management has indicated that formal 2026 guidance will be issued alongside Q4 results, setting expectations for continued double-digit growth as partnerships and field trials convert into revenue. Overall, RADCOM’s financial data over time presents a clear case of a business that is scaling with discipline.
Source: RADCOM Ltd. Q3 2025 Earnings Presentation
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When It Connects
RADCOM sits within a small and specialized group of software companies focused on intelligence and assurance inside telecom networks, rather than end-user applications or generic enterprise IT. Its most relevant public peers are firms that operate close to the network core, selling mission-critical visibility, testing, and automation tools to communication service providers. NetScout and VIAVI represent the scaled incumbents in service assurance and network intelligence, providing a reference point for mature margins and steady operator demand. Allot offers a closer small-cap comparison, sharing telecom roots and a software-led model, while Ribbon Communications adds context around operator-focused network software deployed during cloud and 5G transitions.
Stocks in this cohort behaved very differently over the past year, ranging from a more than 80% gain at VIAVI to a loss of nearly 30% at Ribbon. The stark performance gaps are a classic example of market bifurcation, with investors aggressively rewarding companies that have successfully transitioned – or at least successfully narrated the transition – to software-plus-AI models, as seen with VIAVI and Allot. Meanwhile, markets punished those stuck in legacy cycles, especially when compounded by inconsistent delivery, like Ribbon. NetScout performed well, serving as a “safe-haven” stability anchor due to its large enterprise footprint and value-level multiples.
Meanwhile, RADCOM clocked just over a 7% gain, as its strong fundamentals and consistent delivery largely flew under the market’s radar, chiefly due to low analyst coverage and thin trading volumes. However, record Q3 results drew increased attention to the stock – trading under the RDCM ticker – which has since been mentioned in several financial articles as a “5G stock to watch.” Needham analysts have recently reiterated their “Buy” rating with a price target of $18, implying a potential upside of nearly 40%.
RDCM’s moderate valuation supports this outlook. The stock trades at a discount to the Information Technology sector’s medians and sits below all its peers with the exception of NetScout on trailing and forward non-GAAP P/E multiples, while its GAAP P/E is the lowest among peers with positive GAAP profitability. RADCOM’s trailing and forward price-to-sales, EV-to-sales, and EV-to-EBITDA multiples are also well below peer averages. Although the company does not yet provide EPS forecasts, analyst estimates imply a forward PEG in the range of 0.5x to 1.1x – low in absolute terms and relative to peers and sector medians – signaling that RDCM is undervalued for a profitable growth company.
With profitability established, balance-sheet risk eliminated, and growth visibility improving, RADCOM now sits at a point where incremental execution can translate disproportionately into multiple expansion. In that context, RDCM does not require a new story – only broader recognition of the one already playing out.
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To Sum It All Up
RADCOM is a growth story shaped by the reinvention of how mobile networks are run. What began as a specialist in network visibility has evolved into a software platform that helps operators automate, optimize, and ultimately trust increasingly complex cloud-native environments. As telecom networks become more open, virtualized, and AI-assisted, assurance is no longer a back-office function but a control layer at the center of operations. RADCOM’s technology is designed for that shift, embedding intelligence directly into live networks rather than bolting it on after the fact. Execution has followed strategy, with stronger operating discipline, deeper operator engagement, and growing recognition from partners across the ecosystem. Yet the market still treats RADCOM like a niche telecom vendor rather than a scalable software business. As automation becomes non-negotiable, that perception looks increasingly out of date.
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Smart Growth Portfolio
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