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Big tech captures the spotlight as artificial intelligence (AI) initiatives have helped several tech giants reach trillion-dollar valuations. The three most valuable publicly traded corporations are all investing heavily in AI, and they aren’t secrets at this point.

Many investors know about Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), and Nvidia (NASDAQ:NVDA). While these stocks have generated incredible returns over the long run, there’s a problem with only relying on big-name companies.

It’s possible to generate much higher returns if you allocate some of your capital toward smaller companies. While Nvidia is a household name right now, it wasn’t the case just a few years ago. Buying household names before they become household names can be quite lucrative for patient investors.

Some hidden gems continue to report excellent revenue growth while having high profit margins. Investors looking to diversify their portfolios into under-the-radar stocks may want to take a look at these picks.

CommVault Systems (CVLT)

CommVault Systems (NASDAQ:CVLT) is a cloud security platform that protects companies’ digital assets and helps them monitor their cloud data from a centralized dashboard. The stock has a $5 billion market cap and a 30.5 P/E ratio. It’s up by 49% year-to-date (YTD) and has gained 140% over the past five years.

CommVault Systems’ annual recurring revenue is growing at a solid pace. This figure recently came in at $770 million which is a 16% year-over-year (YOY) improvement. The rising annual recurring revenue gives the cloud security firm a solid base for reporting higher revenue and earnings growth in subsequent quarters.

The company reported 10% YOY revenue growth in Q4 of FY24 to reach $223.3 million in sales. Total annual recurring revenue increased by 2.3% sequentially and continues to inch higher every quarter. YOY revenue growth accelerated across all markets — the Americas and international countries. Higher revenue growth and rising net income — the company reported $23.0 million in net income before an income tax windfall — suggest that CommVault Systems can expand its rally.

Comfort Systems USA (FIX)

Comfort Systems USA (NYSE:FIX) offers ventilation, air conditioning and heating installation and management for industrial and commercial clients. The Russell 2000 member has a market cap above $11 billion and trades at a 32 P/E ratio. It’s been trading like a big tech company, with shares up by 61% YTD and a 5-year gain of 563%.

The stock only has a 0.37% yield. But it tends to raise its dividend twice per year. Comfort Systems USA recently hiked its quarterly dividend from 25 cents to 30 cents per share, marking a 20% improvement. The company only gave out 25 cents per share in two quarters. Before that, the company gave out a quarterly dividend of 20 cents per share.

In addition, Comfort Systems USA continues to report impressive financial growth. Revenue increased by 31% YOY to reach $1.54 billion in the first quarter. Net income came in at $96.3 million which was a 68% YOY improvement. Also, FIX has a healthy $5.91 billion backlog which suggests revenue growth should consider. The $5.91 billion backlog is a 33% YOY improvement from the company’s $4.44 billion backlog in the same quarter last year.

Texas Roadhouse (TXRH)

Fast food restaurant stocks have been gaining plenty of momentum as investors search for the next Chipotle(NYSE:CMG). While several fast food restaurant stocks have posted tech-beating gains over the past five years, there’s a problem. Many of these same fast food restaurant stocks now have excessive valuations that suggest limited upsides and no margins of safety.

That’s where Texas Roadhouse (NYSE:TXRH) is different. Its YTD gain is slightly lower than Chipotle’s. However, that figure still stands at an impressive 43%. Furthermore, Texas Roadhouse stock has more than tripled over the past five years. Despite those gains, the steakhouse chain still has a 35 P/E ratio and a 1.43% yield. Also, Texas Roadhouse recently raised its quarterly dividend from 55 cents to 61 cents per share. That’s a 10.9% YOY increase. 

Moreover, Texas Roadhouse has been reporting solid financials. Q1 of 2024 revenue increased by 12.5% YOY while net income was up by 31.0% YOY. Those growth rates are similar to what Chipotle posted, and yet Texas Roadhouse has a much lower valuation. As Texas Roadhouse expands its footprint through company-owned and franchise restaurants, the stock price should continue to rally. 

On this date of publication, Marc Guberti held long positions in CVLT, FIX, and TXRH. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.