Last Updated on February 25, 2021 by Henry John
There is no doubt that artificial intelligence is the next big thing. We all know this or at least some of us do. In the next few decades, Artificial Intelligence will revolutionize every aspect of life as known today.
According to Grand View Research, “the global artificial intelligence market size was valued at USD 39.9 billion in 2019 and is expected to grow at a compound annual growth rate (CAGR) of 42.2% from 2020 to 2027″.
Big tech companies are aware of this fact and they are all diving into the pool of artificial intelligence. The frontrunners are the usual suspects: Google, Amazon, Facebook, Nvidia, Microsoft and Tesla, among others. And oh! Tesla not so usual, but certainly, one of the most promising.
The global chip shortage has led to the tanking of many technology stocks, it’s like the entire market is crashing. Nonetheless, as most of this tech names fall in price as a result of the temporary shortage of chips, their stock price becomes cheaper, making the entry point, for new investors, extremely attractive.
I’ve been warning my readers about preparing for a possible market crash by ensuring they have enough cash to take advantage of drop in prices like we are seeing now across the board, especially in the technology space. Whether the market is bullish or bearish, there’s always an opportunity.
In times like this, investing in long-term stocks is the most attractive proposition, as it ensures that come what may, over the long run your investment will return promising gains. And the same could be said about long-term growth sectors like in the artificial intelligence space, over the long-run, good AI stocks are going to be flying.
When it comes to long-term technology play, every growth investor should have their eyes on the artificial intelligence space. The investors who have their eyes on and money in the artificial intelligence space are, mostly, in on large-cap artificial intelligence stocks, the big tech companies that incorporate AI systems in their products and/or services.
These big tech companies involved in artificial intelligence usually have a stock price ranging from $100 to over $1500 and that’s too much risk per share for a lot of retail investors, except your brokerage offers fractional share like M1 Finance.
Small-cap artificial intelligence penny stocks with great potential could be the most rewarding long-term and short-term play for the AI pie. These stocks include stocks of companies manufacturing chips for the AI market, big data and data analytics stocks, SaaS stocks, and pure AI companies among others.
If you are looking for cheap artificial intelligence stocks, here are 5 artificial intelligence (AI) penny stocks under $10 and $5 to consider:
1. Ideanomics, Inc. (IDEX)
Ideanomics is mostly referred to as a financial technology company headquartered in New York, however, most of the company’s revenue is coming from its EV business. The company currently fronts as a FinTech company and promotes itself heavily as an EV company concurrently, capitalizing on the popularity of and Wall Street’s bullishness on the two sectors.
The company is so multifaceted that a lot of investors and traders find it difficult to understand what it’s all about, and some even question if it is a real company. To understand IDEX, one has to go back to the very beginning.
Ideanomics was founded in 2004 and went public as a media company in 2017, and over the years, through a series of acquisitions, the company has positioned itself as ‘many things’. It incorporates artificial intelligence and blockchain technology in building out its fintech products, as such it’s an AI, Blockchain, Fintech, and EV stock, basically, the kind of story stock Wall Street traders love to swing.
Simply put, the company’s focus is basically investing in trending technologies. It invested in cryptocurrencies, IoT, and autonomous driving among other trending themes. The company’s portfolio includes dbot, Intelligenta (an AI-based solution), Liquefy (a blockchain technology platform), Logistorm (an IoT company), Solectrac (a smart electric tractor company), Timios (a real estate transaction platform), Treeletrick (an electric bike company) and Wave (an EV charging solution provider).
In a market that is extremely speculative, IDEX is the perfect stock for experienced speculators and short-term story traders. You could make a lot of money swinging this stock, In Mid-November 2020, its stock traded around $1 per share, 9-10 weeks later it was trading around $5 per share. Over 400% return in 9 – 10 weeks!
And I also believe that there could be a long-term play with IDEX. The company is investing in really promising markets, as such, it should not be downplayed, IDEX could become another NIO (I wouldn’t be surprised if it does). Investors today buy stories and IDEX has a lot of promising stories to sell.
2. Duos Technologies Group, Inc. (NASDAQ: DUOT)
Duos Technologies Group, Inc. designs, develops and delivers artificial intelligence-based security, safety, and analytics solutions in North America, and its stock currently trades under $10.
The company offers top intelligent solutions; rip (Railcar Inspection Portal), alis (Automated Logistics Information System), trackaware (Intelligent Right of Way Safety and Security Solution), apis (Automated Pantograph Inspection System), vue (Vehicle Undercarriage Examiner), and icas (Intelligent Correctional Automation system), all of which are highly innovative solutions that are transforming how critical infrastructures across various industries are built. These industries include retail, law enforcement, transportation, oil and gas, and utility space.
Duos Technologies was incorporated in 1990 and has been in the intelligent security and safety solution business since 2001. It became a public company in 2015 through an OTC listing, and in 2020, it became one of the few companies to be listed on the NASDAQ having traded over-the-counter (OTC).
The company has the potential to become a successful long-term AI play with its strong portfolio of intellectual property. And its core competencies revolve around building intelligent technologies for transforming rail transportation.
3. Innodata Inc. (NASDAQ: INOD)
Innodata is a leading data engineering company with operations in the United States, Canada, United Kingdom, and Netherlands. The company uses advanced artificial intelligence and machine learning (AI/ML) models to help its clients solve complex data challenges, create useable digital data, and set up effective marketing strategies. And the company recently expands its AI capabilities to support large-scale robotics artificial intelligence initiative.
INOD currently has a stock price under $10 and it’s one of the few pure AI penny stocks. It has a market cap of $150 million which is currently less than 5x sales, which shows that the stock is relatively underpriced.
The company is working towards establishing itself as a global data engineering powerhouse long-term that serves clients from various industries in various capacities.
For the time being, it primarily serves publishing, media, and information service companies, and has prominent clients such as Apple, Bloomberg, Reed Elsevier, and Wolters Kluwer.
When it comes to pure AI penny stocks play, INOD is one of the very best with enormous growth potential. It also provides consulting services and has been in the digital data business for over 30 years, an experience that will serve and is serving them well as they rally to capitalize on the artificial intelligence boom, a boom that is in many ways will spark a data engineering boom.
4. CooTek [Cayman] Inc. (NYSE: CTK)
CooTek is a big-data-driven mobile internet company that develops and offers a host of software applications that are built with artificial intelligence and machine learning technologies. It operates in the United States and internationally.
Its most popular product is the TouchPal Smart Input, an AI-based alternative input method for mobile devices, its available android, iOS, Windows Mobile and Windows 8. The TouchPal supports approximately 110 languages and has over 100 million daily active users.
CooTek has a lot of software in its portfolio that it monetizes through advertisements. Its portfolio of apps includes health and fitness apps like Hi Shou, Drink Water Reminder, HiFit, ManFit, Abs Workout, Step Tracker, Cherry and Happy Jogging, a popular online literature app Fengdu Novel, and some Casual Games like Idle Land King Tycoon, Farm Hero (I remember playing this game years ago), Crazy Painting and Hi Hamster.
The company also offers VeeU, a short video sharing platform that aggregates video content and professional user-generated short videos.
When it comes to leadership, the company has an impressive management team who have experience working in world-class software application companies. The company’s CEO (Michael Wang), President (Susan Li), and CTO (Karl Zhang) were former employees of Microsoft, who worked as a product manager at Microsoft R&D Group in China, program manager at Microsoft China, and research and development manager at the Microsoft Advanced Technology Center, respectively.
CTK has a market-cap that’s over $270 million with a stock price that’s under $5. The company’s stock has grown over 60% YTD and has a trailing twelve months revenue of $408.05 million, this entails that its stock is currently trading at <1x sales which makes it a relatively cheap stock.
5. Remark Holdings, Inc (MARK)
Remark Holdings is an artificial intelligence company that engages in the development of AI-based solutions for businesses and software developers in numerous industries such as retail, banking, education, entertainment, and public safety among others.
The company also operates a digital media business that delivers dynamic contents to aid businesses and organizations in their marketing efforts.
It operates as a diversified global technology company through its portfolio of companies that includes Kankan AI (a big data and artificial intelligence company), bikini.com (a beach lifestyle e-commerce website), Remark Entertainment (its digital media division), vegas.com and lasvegas.com (travel and tour websites) and sharecare (a health and wellness engagement platform).
In basically all of its operations, the company uses artificial intelligence and machine learning technologies to give it an edge over competitors. SuperDraft, a daily fantasy sports platform, picked Remark Entertainment as an exclusive marketing partner ahead of the competition partly because of Remark’s impressive AI solutions.
MARK is currently up over 70% YTD and trades as a penny stock under $5, however, the stock is relatively not cheap, having a market cap over $300 million and trades at a price over 50x annual sales. The company however has a promising future and a major pullback in its stock price will make the entry price attractive for both the long-term investors and short-term traders.
Artificial intelligence is making waves, upsetting the status quo and it’s here to stay. AI is the future, therefore, investing in artificial intelligence is like investing in the future.
It’s a tough call but whatever and whenever you decide: it will be your call. Stocks are tricky right?
You will find a list of articles below to help you out in making the best possible call.
When stocks are attractive, you buy them. Sure, they can go lower. I’ve bought stocks at $12 that went to $2, but later went to $30. You just don’t know when you can find the bottom.Peter Lynch
- Investing Tips: Stock Market Investing Tips & Guide for Beginners
- Know your Stock: A Beginners’ Introduction to Artificial Intelligence
If you have any questions or thoughts, leave a comment down below.