3 AI Small-Cap Stocks With Strong Insider and Institutional Buy-In

The “Great Rotation” has investors trimming profits in leading tech stocks and putting money elsewhere, including small-cap plays. The Russell 2000 is leading the market rebound in Q2, up 15% from March lows, and it is likely to continue rising. Stocks on this list are poised to benefit from these trends, with insiders and institutional inflows highlighting the opportunities. What they all have in common, aside from their small size, is AI. AI is driving an improving outlook; the question now is whether these companies can follow through and deliver the results.

CS Disco: The Long of the LAW Gets an AI Boost

CS Disco (NYSE: LAW) is a cloud-native AI-powered platform for legal assistance. It aids lawyers and offices with everything from legal holds through case management, automating many processes along the way. The company produces revenue and is growing. The recent results reveal acceleration, which may continue in the upcoming quarters. The company isn’t yet profitable, but has a clear pathway, with adjusted EPS expected as early as fiscal year 2028.

Insiders, including the CEO and several directors, are buying this stock, which is significant because they already hold a double-digit stake. Their activity is amplified by the institutions, which own a surprising 58% of this micro-cap name and have been accumulating shares. InsiderTrades data shows them buying at a steady pace, accumulating for five consecutive quarters at an approximately $5-to-$1 pace, providing solid support for the stock’s price.

Analysts rate the stock as a Hold, but the price targets and bias reveal a more bullish posture. The bias of the four analysts tracked is 50% in favor of Buy, with a consensus of $8, an 85% increase from current prices. Recent stock price action aligns with the institutional activity and bullish analysts’ stance, confirming support at long-term lows and the capacity to sustain support, if not advance from late-April price levels.

Catalysts for this stock include expanding digital use and penetration of AI. The company’s Cecilia model is a standout, providing eDiscovery assistance and automation services.

Kaltura Makes the AI Pivot: Market Says Whoa

Kaltura (NASDAQ: KLTR) is a video and media specialist amid a major shift. The company is leaning hard into AI, aiming to establish itself as the AI-powered provider of employee/customer experiences. Headwinds in 2026 include tepid results, contracting revenue, and tepid guidance. The company can make money, but profitability has just been reached, and current forecasts are not optimistic. That said, insiders own a substantial 13% of this company and key executives, including the CEO and an executive vice president, bought shares this year.

Analysts are also optimistic about this stock’s turnaround. InsiderTrades tracks only two, but the consensus Hold rating comes with an expectation of more than 100% upside in the stock price. The bad news is that institutions, which own about 30% of the float, distributed shares in Q1. The combination of weak results and intense competition was more than enough to offset plans for an AI-driven turnaround.

Catalysts this year include acquisitions and a hard lean into agentic AI. The purchase of PathFactory enhances its agentic capability, centered on automated and AI-assisted content and experience creation. The company aims to move businesses away from static landing pages to a more active experience.

Thryv Grows, Profits in 2206: Institutions Are Buying

Thryv (NASDAQ: THRY) is a cloud-based digital marketing tool that provides services for businesses across verticals. Its ad-driven business is expected to contract in 2026, but profitability will improve significantly. Insiders buying this stock include the CEO, CFO, and two directors, who’ve been buying it steadily for years. Insiders own about 10% of the shares and show considerable confidence in the future.

Analysts rate Thryv as a Hold, but, as with CS Disco, the internal data reveals a more bullish posture. There are seven analysts covering this stock, enough to put some conviction in the rating, and the bias is balanced, but the price target suggests a 180% upside is possible. Institutions are also bullish on this name, more so than analysts, owning nearly all remaining shares and buying aggressively in early 2026.

Price action in this stock is iffy. The market may have hit bottom in March, but the downtrend is still in play. Critical resistance is at the 150-day exponential moving average and may produce a vigorous downswing when reached.

Key catalysts include the rollout of its AI-powered platform, announced in March, and the push to improve client quality. Rather than rely on legacy clients, the company is in a go-to-market posture, actively marketing its new tools.

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