The AI Investing Pulse

December 11th, 2025

In this Week’s Edition:

1. Analysis - AI market rotation: 3 mid-cap stocks to watch

2. Stock Ideas - 7 best hardware stocks with strong analyst support

3. News - Grid tech stocks set to surge

4. Startups - Building a one‑person unicorn

5. Trends - Agentic AI: the next major trend

6. Other News - Trump’s executive order reshapes US AI regulation

7. Videos - Tech bull to run for 2 more years, says Wedbush’s Dan Ives

AI Market Rotation: 3 Mid-Cap Stocks to Watch

With rate cuts easing financial conditions and the Russell 2000 breaking into new highs, investors may be witnessing the early signs of a rotation from mega-cap AI leadership toward small/mid-cap names with more reasonable valuations. While this shift is not guaranteed, it reflects a market increasingly willing to explore overlooked areas of the AI stack where operational leverage and differentiated exposure are emerging.

Weak earnings from major cloud players, including Oracle’s disappointing cloud revenue results, have added pressure to large-cap AI names and opened the door for mid-cap software and infrastructure beneficiaries. At the same time, improving breadth in mid-cap indices and a stronger risk environment suggest that investors are reassessing the balance between momentum, fundamentals, and valuation across the AI landscape.

This week, we highlight three mid-cap companies that represent different angles of this potential rotation: one on our Watchlist (JFrog), one Fundamental Leader (Pegasystems), and one Momentum Leader (Viasat).

JFrog Ltd. $FROG ( ▼ 0.15% )  

Sector / Industry: Technology / Software – Application
AI Stack Layer: Application & Edge (AI in DevOps & Continuous Integration)
Market Cap: $8.1B
Performance (Weekly): 10.6%
Fundamental Score: 86 / 100
Relative Strength (RS): 93 / 100
AIIP Ranking: Watchlist

What the Company Does
JFrog provides a DevOps platform that automates the delivery, security, and management of software artifacts across cloud and hybrid environments. Its tools are core to CI/CD workflows and increasingly important as AI-driven development accelerates the need for faster, more reliable software releases.

Why It Stands Out
Strong weekly performance, high momentum (RS 93), and solid fundamentals (86).
JFrog stands out for a balanced combination of fundamental strength and momentum, making it a compelling Watchlist name within the mid-cap AI ecosystem.

Pegasystems Inc. $PEGA ( ▼ 0.26% )  

Sector / Industry: Technology / Software – Application
AI Stack Layer: Application & Edge (AI in CRM, Workflow Automation)
Market Cap: $10.4B
Performance (Weekly): 7.3%
Fundamental Score: 87 / 100
Relative Strength (RS): 67 / 100
AIIP Ranking: Fundamental Leader

What the Company Does
Pegasystems offers an AI-powered automation and customer engagement platform that helps enterprises streamline workflows and modernize legacy processes. Its real-time decisioning and workflow automation capabilities make it a key player in operational AI adoption.

Why It Stands Out
PEGA achieves a leading Fundamental Score of 87, supported by high margins and improving earnings quality. Its RS score (67) reflects steady progress.
Pegasystems stands out as the week’s Fundamental Leader, exemplifying mid-cap software names gaining attention as investors re-rate profitability.

Viasat, Inc. $VSAT ( ▲ 3.24% )  

Sector / Industry: Technology / Communications – Satellite & Connectivity
AI Stack Layer: Network & Connectivity (Satellite Communications & Remote Connectivity)
Market Cap: $5B
Performance (Weekly): 6.1%
Fundamental Score: 54 / 100
Relative Strength (RS): 99 / 100
AIIP Ranking: Momentum Leader

What the Company Does
Viasat delivers global satellite broadband and secure communications for aviation, enterprise, government, and consumer markets. Its high-capacity satellite networks support growing demand for resilient connectivity as AI and data-heavy applications expand worldwide.

Why It Stands Out
With an RS score of 99, Viasat is a standout in pure price momentum.
Fundamentals are moderate (54), but its strong trend and macro sensitivity make it the clear Momentum Leader in this week’s mid-cap rotation.

Final Take

The week’s action highlights how investors may be broadening exposure beyond mega-cap AI leaders as easing financial conditions shift attention toward mid-cap software, automation, and connectivity names. While the rotation is still early, performance in companies like JFrog, Pegasystems, and Viasat suggests growing appetite for AI enablers with differentiated business models and more compelling valuations.

JFrog demonstrates balanced growth and momentum, Pegasystems anchors the fundamental narrative, and Viasat represents high-conviction momentum. Each offers a distinct way to position for a potential mid-cap AI leadership cycle.

_{Disclaimer - This content is provided for informational purposes only and does not constitute investment advice, personal recommendations, or an invitation to engage in any investment activity. The information presented is derived from publicly available sources and should not be solely relied upon for making investment decisions. Always consult with a qualified financial professional before making investment choices. Past performance is not a guide to future performance.}

^{About AIIP - The AIIP Index tracks 173 AI-focused public companies across the full AI stack, serving as our benchmark for sector performance. All scores are proprietary and calculated using data from Finbox (powered by S&P Global Intelligence). AIIP Total Score (0–100) combines metrics for sales and EPS growth, financial quality, and valuation to assess overall business strength. AIIP Relative Strength (RS) Score measures a stock’s price performance relative to the AIIP 173 AI stocks. Ranking Status is based on score combinations: Fundamental: Total Score ≥ 70, RS < 80. Momentum: RS ≥ 80, Total Score < 70. Watchlist: Total Score ≥ 70 and RS ≥ 80}

The Future of Shopping? AI + Actual Humans.

AI has changed how consumers shop, but people still drive decisions. Levanta’s research shows affiliate and creator content continues to influence conversions, plus it now shapes the product recommendations AI delivers. Affiliate marketing isn’t being replaced by AI, it’s being amplified.

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TOP AI STOCKS PERFORMANCE

TOP AI ETFs PERFORMANCE

AI STOCKS IDEAS

7 best hardware stocks with strong analyst support – Insider Monkey

A curated look at seven hardware companies earning strong analyst support, with emphasis on growth potential, hedge fund sentiment, and positioning amid accelerating technological trends.
Read the full article

The smartest quantum computing stocks – The Motley Fool

IBM, Alphabet and ASML are positioned as the strongest long‑term quantum computing plays based on research strength and financial resilience.
Read the full article

The next best AI stock – The Motley Fool

Top AI names including Nvidia, Arm Holdings, Globant, Arista Networks and Shopify are highlighted for their transformative potential and expected returns heading toward 2025.
Read the full article

AI STOCKS & ETFs NEWS

Grid tech stocks set to surge – Yahoo Finance

Industry developments and accelerating grid modernisation continue to strengthen the outlook for companies operating in next‑generation grid technologies.
Read the full article

AppLovin soars on AI‑powered ad tech rally – MarketMinute

AppLovin shares jumped to $724 as investors rallied around its expanding AI advertising capabilities, reinforcing confidence in its future growth trajectory.
Read the full article

Growth stocks dominate S&P 500 amid AI momentum – MarketMinute

AI enthusiasm continues to push growth stocks higher, raising concerns around market concentration as investors favour a narrow cluster of outperformers.
Read the full article

How SoundHound's agentic AI is reshaping enterprise CX – Nasdaq

SoundHound AI's Agentic+ architecture supports rapid deployments and meaningful improvements in enterprise customer experiences, with Q3 2025 revenue rising 68%.
Read the full article

AI STARTUPS

Building a one‑person unicorn – Forbes

A startup has raised $87M to help solo founders build billion‑dollar companies, marking a shift towards lean, high‑efficiency entrepreneurship models.
Read the full article

a16z & Lightspeed lead $475M seed round for AI computing – Tech in Asia

a16z and Lightspeed head a major seed round funding next‑generation US AI computing startups.
Read the full article

AI TRENDS

Agentic AI: the next major trend – The Globe and Mail

Agentic AI, capable of autonomous and proactive decision‑making, is emerging as the next frontier in automation and enterprise efficiency, surpassing traditional generative AI.
Read the full article

AI web development trends for 2025 – MobileAppDaily

AI continues to reinvent web development through predictive analytics, automated coding, personalisation and enhanced customer support systems.
Read the full article

The Blackwell chip & the future of AI development – SiteProNews

Nvidia's Blackwell architecture introduces major leaps in performance, memory capacity and security, enabling faster training and deployment of advanced AI models.
Read the full article

OTHERS

Trump’s executive order reshapes US AI regulation – CNET

President Trump rescinds prior federal AI policies, leaving regulatory authority to individual states and raising concerns about fragmented national oversight.
Read the full article

Sam Altman says Apple not Google is OpenAI’s real competitor – The Times of India

Altman argues that the next major competitive frontier lies in hardware innovation, with OpenAI preparing to launch new devices by late 2026.
Read the full article

VIDEOS

Tech bull to run for 2 more years, says Wedbush’s Dan Ives - CNBC

3 stocks for the next wave of AI infrastructure – MarketBeat

_{Disclaimer - The information contained on this newsletter does not constitute investment advice or a personal recommendation, nor is it an invitation or inducement to engage in investment activity. You should seek independent financial and, if appropriate, legal advice as to the suitability of any investment decision. Past performance is not a guide to future performance. The value of investments, and the income from them, can fall as well as rise. You may not get back the full amount invested and, in some cases, nothing at all. The information presented is based on publicly available data and sources believed to be reliable; however, its accuracy or completeness cannot be guaranteed. Market conditions can change rapidly, and the information provided may no longer be up to date. This content is for informational purposes only and should not be construed as financial, legal, or tax advice. Data sources: S&P Global Market Intelligence}