In March 2024, Dell Technologies unveiled its “AI Factory with Nvidia,” a partnership blending Dell’s servers and networking power with Nvidia’s semiconductors and software to produce AI-driven products for other enterprises. Like all big tech companies, Dell has placed a heavy focus on artificial intelligence, and its stock has grown fourfold since the start of 2023.
Behind the scenes, a little known company called TSS Inc. has been a much bigger winner. In September 2023, when Dell named TSS a “first choice partner” for being a top-performing data center integration partner, TSS’ market cap was a mere $10 million. But in October 2024, TSS inked a multi-year deal with Dell to integrate AI-enabled racks of servers, and today, the business is worth $440 million. Its shares have grown 6,000% since the start of last year, all thanks to its prized customer.
TSS disclosed in its 2024 annual report that 99% of its $148 million in revenue for the year came from a single OEM (original equipment manufacturer) customer. Last year TSS’s revenues almost tripled its 2023 total, and it generated another $143 million in sales in the first half of 2025, up 410% from last year’s first half.
The majority of its revenue comes from its “procurement services” segment, or fulfilling orders of specialized containers and components that Dell needs for contracts with agencies like the Department of Defense. But the higher margin part of its business is its rack integration segment, or building and wiring racks of servers, including the plumbing and cooling systems that are getting increasingly complex as more power is needed.
TSS doesn’t officially specify who its dominant customer is, but it’s widely known among stock analysts and investors that it is $101 billion (revs) Dell. Until a few months ago TSS was based in Round Rock, Texas down the road from Dell’s headquarters. Rapid growth prompted it to move 12 miles away into a facility twice the size in the Austin suburb of Georgetown. Its CEO Darryll Dewan spent a decade in sales at Dell before taking over at TSS in November 2022.
“Everybody asks about why our OEM customer doesn’t either do this themselves or acquire us, and the answer is pretty simple. They’re very happy with the service they’re getting today,” says Peter Woodward, TSS’s chairman whose 10.5% stake through his investment firm, MHW Capital Management is now worth over $40 million. “They have some internal capability to do this themselves, but we still get a healthy portion of their business. They’re always going to be like that, as many OEMs are for this type of service.”
Eventually, Woodward expects to grow TSS’s capacity to be able to serve other customers as well, eyeing cloud service providers like Amazon, Microsoft and Oracle. Thanks to Dell, TSS earns the No. 1 spot on Forbes’ 2025 ranking of America’s Most Successful Small-Cap Companies. To come up with the 100 best small-cap stocks, Forbes analyzed about 1,400 companies with market caps between $300 million and $5 billion, raising the peak value from $2 billion largely because the weighted average market value in the Russell 2000 index tracking small-cap stocks is now $4.3 billion.
We filtered out companies which had share prices below $5 or whose revenues declined in the last 12 months, then ranked the remaining 621 stocks based on stock return, sales growth, return on equity and earnings growth over the last five years, with more weight given to the last 12 months of data. Financial institutions, REITs, utilities, royalty trusts and limited partnerships were excluded.
The Russell 2000 as a whole has remained a laggard compared to the large-cap S&P 500 Index. Its 9% gain so far this year trails the S&P 500’s 14% appreciation, and although it touched its first all-time high in four years in October, it still trades at about the same price as it did in November 2021. The S&P 500 is up 43% over the same time span. Small-cap portfolio managers are still waiting for the valuation gaps between large and small-cap companies to narrow, staying hopeful that adopting AI will help reverse that trend.
“We believe AI will disproportionately benefit small-cap businesses because they’re more nimble, and they’ll be better able to adapt and implement AI workflows,” says Ken Farsalas, portfolio manager of the Oberweis Small-Cap Opportunities Fund, which has $1.7 billion in assets. “Large-cap companies are fat and lazy and loaded with bureaucracy. For them, it’s like turning an oil tanker in a river.”
For investors looking for small-cap names directly linked to the AI revolution with more customer diversification than TSS, there are more than a dozen to choose from on Forbes’ list. The fourth-ranked firm on the list is Ridgefield Park, New Jersey’s Innodata, a $2 billion (market cap) data engineering business that digests and provides reams of data to tech giants to train their AI models. Innodata went public in 1992 and has been led by CEO Jack Abuhoff since 1997, but didn’t take off until the AI boom of the last three years.
Innodata’s $228 million in 12-month sales have more than doubled year-over-year, and it has netted $43 million in profit in that span, counting five of the seven “Magnificent Seven” tech giants as customers. Its shares are up 2,000% since the start of 2023. While privately-held competitors like Scale AI and Surge AI have larger valuations and have minted billionaires, Scale’s sale of a 49% equity stake to Meta in June at a $29 billion valuation could force Meta’s peers to look to other options like Innodata for their data needs, analysts predict.
“Those are great companies on the private side. Innodata has been a sleepier name, but they’ve been able to put themselves in prime position to monetize this opportunity,” says Dan Ives, the head of technology research at Wedbush. “It was a diamond in the rough stock that investors were very late to recognize.”
The top 20 on the list also includes industrial power providers Power Solutions International, Argan, Graham Corp. and Powell Industries, whose stocks have all soared from providing the energy infrastructure for data centers. ACM Research, which provides cleaning equipment to chipmakers, is 24th after its stock rose 120% in the last year. Semiconductor manufacturer Ambarella, which specializes in chips designed for edge computing, or running AI tasks directly on devices instead of sending data to the cloud, has gained a more modest 25% this year but made the cut at No. 88.
Growth investors could also look at Amprius Technologies, a Fremont, California-based battery manufacturer for drones and robotics applications. It went public via a SPAC merger in September 202 and lost 93% of its value through September 2024 but has recouped all those losses with a 1,500% gain since then, despite only recording $33 million in revenue in the last year. It’s 82nd on the list. Boston Drone maker Ondas Holdings likewise only has $16 million in 12-month sales, but investors have bid its price up 600% in the last year pushing its market cap up to $1.5 billion, and helping it land at No. 79.
And for investors terrified that the stock market’s AI euphoria will soon come crashing down, there’s something for them too: Phoenix, Arizona’s Universal Technical Institute, a for-profit network of vocational schools with 20,000 full-time active students learning trades like welding, nursing or auto body repair. Its 12-month sales are $809 million, up 15% from the prior year. Its stock sports a relatively modest price-to-sales ratio of less than 2, despite the fact that its price has doubled since last June, as investors bet that students will flock to its programs that are less vulnerable to AI than white-collar desk jobs.