Sometimes it’s the not-so-familiar names that offer the potential for market-beating returns.
For those keenly focused on artificial intelligence (AI) stocks, there are the usual suspects. From graphics processing unit (GPU) leader Nvidia to hyperscalers like CoreWeave and Nebius, it’s unsurprising when investors focused on AI stocks find certain names popping up again and again — and again.
But the lack of popularity with respect to other AI-focused companies doesn’t mean that their stocks are any less desirable. In fact, it’s possible that those names that are less familiar have the potential to provide market-beating returns.
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Look beyond the hype with these hyperscaler names
AI investors may not be able to speak to the super-specific, technical aspects of AI technology, but one thing they’re likely familiar with is the importance of data centers. Providing the capability for AI computing to occur, data centers — the sources of massive investments from AI companies — have emerged as a critical aspect of AI development. Nvidia reported in its first quarter 2026 that data center revenue totaled $39.1 billion, climbing 73% year over year, and it announced it’s building factories to produce its AI supercomputers in the U.S. in support of data center development.
Some data centers, however, are hyperscalers — specifically designed to support the high computing demands of AI. Recognizing their importance, AI investors have leapt at the opportunity to load up on hyperscaler stocks like CoreWeave and Nebius to broaden their AI exposure.
Say “hi” to this hyperscaler helper
While savvy investors recognize the value of hyperscalers, they may be missing a related opportunity that’s less discussed. Brandishing itself as the world’s largest IT infrastructure services provider, Kyndryl (KD -1.34%) stands to benefit from the growth of hyperscalers.
With respect to its cloud services business, Kyndryl identifies in a recent filing that it helps businesses to improve the effectiveness of their work with hyperscale cloud providers in a “unified environment by seamlessly integrating services delivered by independent software vendors (ISVs), large public cloud providers, internal platforms, and other technologies.” In other words, Kyndryl adds value in helping companies to bring everything together, including the smooth combination of services from different software companies, big cloud providers, their own systems, and other technologies.
Although it generates revenue from a variety of sources, hyperscaler-related revenue is providing a major engine of growth for the company. In June 2025, Kyndryl generated $1.4 billion in revenue over the previous 12-month period, a 119% increase over the 12-month period that preceded June 2024.
At the same time its hyperscaler-related revenue is soaring, Kyndryl’s total revenue has been on the decline, sliding to $15.1 billion in 2025 from $16.1 billion in 2024 and $15 billion in 2023. While this may be disconcerting, it illustrates how the company is pivoting to seize the growing opportunity that its hyperscaler business presents.
Kyndryl’s AI expertise extends beyond hyperscalers
Those speculating that Kyndryl is a Silicon Valley start-up with little experience may be surprised to find that the company has a much richer legacy. Operating as an independent company for nearly four years, Kyndryl is the result of a spinoff from its former parent company, International Business Machines.
Over the past few years, Kyndryl has succeeded in forging partnerships with leading AI companies. In May 2024, for example, Kyndryl announced a partnership with Nvidia wherein the two companies will collaborate to provide “customers looking to rapidly scale generative AI solutions to remain competitive in their respective industries.” For example, with Nvidia’s help, Kyndryl will add generative AI capabilities to its Kyndryl Bridge platform, which helps customers integrate data across their enterprise.
Demonstrating how its cloud prowess transcends hyperscalers, Kyndryl is working with Amazon to expedite the modernization of mainframe applications and data for Amazon Web Services (AWS). Plus, it partners with leading cybersecurity companies like Rubrik to help protect customers from cyberattacks in several ways, such as reducing the amount of downtime that customers suffer from a cyber incident.
Is now a good time to pick up Kyndryl stock?
Whether Kyndryl has the ability to reproduce the incredible performances of leading AI stocks like Nvidia is questionable. However, there’s certainly a conceivable path forward for Kyndryl stock to provide a market-beating performance as the AI industry develops thanks to its ample hyperscaler exposure and other AI-related businesses.
With shares of Kyndryl currently trading at only 13.7 times forward earnings, today certainly seems like a good time for patient investors to click the buy button on Kyndryl stock.
Scott Levine has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, International Business Machines, Kyndryl, and Nvidia. The Motley Fool recommends Nebius Group. The Motley Fool has a disclosure policy.
