Penny stocks representing companies integrating AI into products and services hold particularly interesting upside. Penny Shares are known to move upward rapidly and the emergence of AI continues to produce rapid gains.
While the companies discussed below are speculative and deserve to be treated as such, they remain worth watching. Investors who invest in innovative firms in this space from the beginning will receive handsome rewards.
Investors should only invest what they are willing to lose to be sure. That’s the promise of AI penny stocks: to turn a small amount of capital into a much larger sum of money via speculative bets.
Foxo Technologies (FOXO)
Foxo Technologies (NYSEAMERICAN:FOXO) is an inexpensive biotech stock at the Leading Edge of an emerging area of science. The company engages in the further development of epigenetics, the study of how environmental factors affect genes.
Foxo Technologies applies artificial intelligence and machine learning to Better understand the epigenetic biomarkers underlying human health.
The problem here is that Foxo Technologies is particularly risky. The company’s financial statements are scant at best. Those that exist show strong growth but the obvious risk remains.
The company has undertaken a lot of risky moves over the recent past including a reverse stock split. that did not result in higher prices and the company faces ongoing listing trouble due to its low share price. However, if Foxo Technologies can produce something of material value showing that it is forwarding its epigenetics platform it will provide rapid gains. Yet, if the company moves forward with its potential pivot into critical materials it is probably best left alone.
Himax Technologies (HIMX)
Himax Technologies (NASDAQ:HIMX) is a much better option for investors looking to gain exposure to AI penny stocks. It is a semiconductor firm with a much more established business based on its share price, which is above $5.
It is a fabulous Semiconductor Company that provides Integrated circuits (ICs) to companies located globally. One product that Himax Technologies provides is called the Endpoint AI Development Board. It has application in the fields of computer and machine vision.
There’s a lot to like about Himax Technologies from a fundamental perspective. Revenues and earnings both beat expectations during the most recent quarter despite an overall downturn. Part of the reason that the company is currently having trouble has to do with its strong connection to the automotive industry.
Electric vehicles are ideal for computer and machine vision. Electric vehicles need more chips than gasoline vehicles. The sector’s downturn has impacted Himax Technologies. However, the company did do better than anticipated which is a strong reason in and of itself to consider investing.
BigBear.ai (BBAI)
BigBear.ai (NYSE:BBAI) is an analytics firm that applies the disciplines of machine learning and artificial intelligence to help its customers better understand their data.
The stock certainly has the potential to double an investor’s capital. It’s also very volatile based on its beta of 3.04. That means that Big Bear AIS shares move three times as fast as the market overall. Of course, that can be very good or very bad.
The company operates through two primary segments. One, its Cyber and Engineering segment is essentially its IT consulting arm. It deals with areas such as cybersecurity networking operations. The other segment is its Analytics team, which deals more with big data computing.
The company anticipates reporting single digit EBITDA growth in 2023 based on a revenue range between 155 to 170 million. Like Himax Technologies, BigBear.ai is also investing in the computer vision sector. The company agreed to acquire computer vision firm Pangiam during the third quarter.
Bullfrog AI Holdings (BFRG)
The biggest reason to invest in Bullfrog AI Holdings (NASDAQ:BFRG) is the combination of psychiatric treatment and artificial intelligence. There is no sector that is hotter than artificial intelligence at the moment.
It doesn’t look like it’s going to slow down. AI is a transformative technology that has all the potential to reshape the world. The field of mental health and psychiatric help is also one which is burgeoning. It’s the combination of both of those fields that makes bullfrog AI Holdings particularly interesting.
In January, the price of bullfrog AI Holdings stock skyrocketed upon the news that the company Is collaborating with Lieber Institute to map the brain using AI.
That news caused shares to spike and then they quickly returned to their former levels. Some investors would rightly characterize this as a pump and dump, something not uncommon to the world of penny stocks by any means.
However, the company is going to discuss its findings in connection with the Lieber Institute on March 5 at a fireside chat. Investors should expect that any positive news could again serve to spike those share prices.
ParaZero Technologies (PRZO)
ParaZero Technologies (NASDAQ:PRZO) Serves an industry in which critical failures can be particularly costly. That industry is the autonomous drone industry. ParaZero Technologies provides Autonomous parachute Safety Systems for drones.
When one considers that the average cost of a medium altitude long endurance drone is between $10 million to $15 million the necessity of insurance becomes obvious.
ParaZero Technologies doesn’t yet provide parachutes for drones of that size. It currently serves a commercial customer enthusiast who owns recreational drones. However, those drones are also quite expensive and can be dangerous if they fall into a crowd.
The company also offers products tailored to passenger drones and it’s reasonable to assume that it has a potential market in the aforementioned defense drones. In fact, the company entered into a strategic partnership at the end of 2023 intended to further develop that potential market. While ParaZero Technologies has a lot of potential, the company is currently struggling with listing requirements as its share price continues to persist below the $1 threshold required by the Nasdaq.
Inuvo (INUV)
Inuvo (NYSEAMERICAN:INUV) stock is inherently interesting for one primary reason: The company doesn’t use third-party cookies. Using third-party cookies is controversial and is one that many of the larger tech companies continue to wrestle with.
Apple (NASDAQ:AAPL) has banned the use of third-party cookies and other Silicon Valley firms will soon follow suit. Google (NASDAQ:GOOG, NASDAQ:GOOGL) is slated to ban their use in the second half of this year.
Inuvo has developed a service that can help companies better understand search intent without the use of invasive cookies. The company calls that product IntentKey. Companies have increased their ad spend as the tail end of a higher rate environment emerges.
Those companies are going to have to increasingly deal with new methods to understand how to most efficiently spend ad revenues. That’s going to be much harder as Silicon Valley firms have less and less access to cookies. that makes Inuvo particularly interesting through its intent key service.
FiscalNote Holdings (NOTE)
FiscalNote Holdings (NYSE:NOTE) is an AI analytics firm with the potential to double and then some. It currently trades for less than $2 and bears a low target price near $5. Forecast stock prices rise as high as $9 implying the potential to quadruple in price.
The company provides AI Enabled regulatory, policy, and Market intelligence software that is growing quickly.The revenues grew by 17% during the most recent quarter, reaching $34.1 million.
That growth allowed the company to reach EBITDA profitability during the period. The company is developing a service called Co-pilot, A large language model service aimed at regulatory risk professionals.
The company serves the public sector and has emerged as one of several firms that are successfully monetizing AI within government. FiscalNote Holdings benefits from a ‘strong buy’ rating overall.
It’s very easy to imagine that the company will have a fertile sales pipeline within the public sector. It is a less competitive sector overall and firms that can establish their name early can thrive. FiscalNote Holdings looks like it has that potential.
On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
