Cash Flow Stocks Investors Are Still Missing In AI Infrastructure And Automation

Services activity in the US is running hot again, with the August composite PMI at 56 and services at their strongest level since December 2024. Cash is still flowing through the real economy, yet some companies with solid cash flow potential trade below fair value on SWS DCF. That gap is where value investors can find opportunity. This article highlights three of the most compelling stocks from the Undervalued Stocks Based On Cash Flows screener.

The stocks below are just a starting sample and the full screen surfaced 30 more companies with equally compelling cash flow stories that are not covered here. If you want to move quickly from idea to action, use the Undervalued Stocks Based On Cash Flows screener to identify, filter and analyze the highest conviction opportunities based on your own criteria.

Kraken Robotics (TSXV:PNG)

Overview: Kraken Robotics is a marine technology company that designs and sells Synthetic Aperture Sonar systems such as its KATFISH towed SAS, along with related survey services that can produce recurring cash flows from military and commercial contracts. Around this core, it also supplies subsea batteries, LiDAR and other underwater imaging and survey solutions across global defense and offshore energy markets.

Operations: Kraken Robotics generates most of its revenue from Products at about CA$66 million, supported by CA$41 million from Services, with sales spread across Asia Pacific, North America and Europe, the Middle East and Africa.

Market Cap: CA$1.83 billion

Kraken Robotics gives investors direct exposure to underwater defense and offshore energy activity. Its SAS and KATFISH survey services are central to the investment case and to the cash flow story behind its DCF-based valuation. The company is tying that SAS cash flow potential to a broader platform through the Covelya acquisition and a growing order book in 2026. In addition, a strong balance sheet and completed battery capacity buildout provide room to pursue contracts without heavy new spending. At the same time, Kraken is still loss making and relies on large, sometimes lumpy defense and energy projects, so delays, integration missteps or weaker demand could affect cash generation as expectations rise.

Kraken Robotics is linking recurring SAS cash flows to a broader marine tech platform while investors continue to factor in lumpy project risk. Get the full story in the 2 key rewards and 1 important warning sign

Celestica (TSX:CLS)

Overview: Celestica is a Toronto based electronics and supply chain services company that designs, builds, and supports hardware platforms for original equipment makers and cloud providers, including hyperscalers. Its work on rack scale AI infrastructure such as the Helios platform with AMD ties a growing part of the business to multi year, higher margin contracts that can underpin cash flow, alongside broader manufacturing and after market services across aerospace, industrial and HealthTech markets.

Operations: Celestica generates most of its revenue from Connectivity & Cloud Solutions at about $12.3b, with a further $3.3b from Advanced Technology Solutions.

Market Cap: CA$46.9b

Celestica gives you direct exposure to the build out of AI and cloud data centers, where its hardware platform and supply chain work for hyperscalers can translate into multi year cash flows that underpin the SWS DCF valuation. Analysts have been raising forecasts on the back of record results, rising margins and a growing AI infrastructure pipeline with partners like AMD and OpenAI. The stock is described as trading below some estimates of fair value. A large share of revenue is concentrated in a handful of hyperscaler customers and funded with meaningful external borrowing, so any pause in AI spending or execution slip on new racks could affect cash generation. For investors who are comfortable with that concentration and funding risk, the combination of growth, improving profitability and perceived DCF upside makes Celestica a company that some may consider for further research.

Celestica’s AI rack contracts are accelerating, yet many investors still treat it like a traditional manufacturer. Review the analyst forecasts for Celestica to see how current expectations stack up against one underappreciated risk and a potential upside twist

Constellation Software (TSX:CSU)

Overview: Constellation Software acquires and runs hundreds of vertical market software businesses that provide mission critical tools for sectors like government, healthcare and industry, earning recurring cash flows from licensing, maintenance, professional services and SaaS. This acquisition and hold model is the strongest link to the Undervalued Stocks Based On Cash Flows theme because it focuses on stable, predictable cash generation across many small, niche software markets rather than relying on a single blockbuster product.

Operations: Constellation Software generates all of its reported revenue, about $12.6b, from Software & Programming activities across its portfolio of vertical market software businesses.

Market Cap: CA$64.4b

Constellation Software gives you exposure to a portfolio of critical software businesses whose customers often depend on them for daily operations, which can support recurring cash flows that underpin the SWS DCF valuation signal. The stock is flagged as trading well below the screen’s fair value estimate, despite high quality earnings, improving profit margins and analyst expectations for solid earnings and revenue growth. Recent Q2 2026 results and management commentary on disciplined AI adoption and capital allocation highlight how the company is using AI to improve productivity while staying focused on operating cash flow. The main watchpoints are its high debt levels and reliance on external funding, which make ongoing cash flow resilience and acquisition discipline key for long term investors to monitor.

Constellation Software’s acquisition engine keeps turning, and the real story is how its cash flows, debt and capital allocation fit together. Read the analysis report for Constellation Software to see what the headline numbers might be hiding

Seeking Alternatives Before The Crowd Moves

Fresh ideas move fast. The stocks catching real momentum now may not stay under the radar for long. Check these focused lists before the next breakout and consider your options promptly.

• Target companies with clean balance sheets and solid fundamentals using the curated list of solid balance sheet and fundamentals (12 results).
• Review the hand picked 37 robotics and automation stocks to explore companies involved in automation.
• Explore potential opportunities in crucial infrastructure with the focused 38 power grid technology and infrastructure stocks.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com