Artificial Intelligence Penny Stocks (2024)

Artificial Intelligence (AI) penny stocks represent a high-risk, high-reward segment of the stock market, where shares trade at relatively low prices — often below $5. These stocks are typically associated with small, yet innovative companies focusing on integrating AI into various products and services. For investors and traders, these stocks offer a speculative opportunity to get in on the ground floor of potential technological breakthroughs. However, due to their volatility and these companies’ early stage, they require rigorous analysis and a keen eye for market trends.

10 AI Stocks to Watch

My top AI stock picks for March — rated on chart pattern, price action history, and catalyst — include the following:

You can see how the plan with AI penny stocks is rarely buy-and-hold…

Trading these penny stocks should be approached with a clear strategy and an understanding of the risks involved.

Jump ahead to get to my trading plans for these top AI stocks!

What Are AI Stocks?

AI stocks encompass shares of companies that are engaged in the research, development, and commercialization of artificial intelligence technology. These can range from large tech conglomerates to niche startups, each offering their unique contribution to the advancement of AI.

Putting these securities in your portfolio means putting money behind the transformative potential of AI to revolutionize industries, from healthcare to finance, and beyond. These stocks are attractive to investors looking to capitalize on the growth of smart technology and automation. However, as with any investment, they come with varying levels of risk and exposure to the rapidly evolving tech landscape, where today’s leader can quickly become tomorrow’s obsolete player.

What Is Artificial Intelligence?

Artificial Intelligence (AI) is a game-changer in today’s world. It’s a technology that enables machines to mimic human intelligence. AI is not just about robots; it’s about software, algorithms, and machine learning. It’s about creating systems that can learn, adapt, and potentially act autonomously. AI is used in a wide range of sectors, from self-driving cars to advertising, and it’s transforming the way businesses operate.

AI is also making waves in the stock market. It’s being used to analyze vast amounts of data, predict market trends, and make trading decisions. AI is not just for big tech companies like Microsoft; it’s also being used by penny stock companies to drive growth and innovation. But remember, while AI has the potential to revolutionize industries, it also comes with risks. As traders, we need to understand these risks and make informed decisions.

Advantages of Trading AI Stocks

AI penny stocks can be bought at a low cost, offering traders an entry point into the innovative world of artificial intelligence without a hefty initial investment.

Trading AI stocks can offer several advantages. One of the key benefits is the potential for high growth. AI is a rapidly expanding sector, and companies that are developing innovative AI solutions can see significant growth. This growth can translate into an increase in share price, providing opportunities for traders to make gains.

However, trading AI stocks is not without risk. These stocks can be volatile, and there’s always the risk of losses. But remember, as traders, we don’t fear risk; we manage it. We use tools and strategies to limit our losses and maximize our gains. We don’t just blindly invest in AI stocks; we trade them based on patterns, data, and market insights.

The AI sector’s expansion offers traders the chance to ride the wave of companies at the forefront of innovation. With AI transforming industries, the stocks that stand out are those with solid use cases and robust technology. For those looking to keep their portfolios as sharp as their trading strategies, studying up on the past top artificial intelligence stocks to watch is key. This list not only highlights the movers and shakers of early 2023, but also provides insights into why they were the ones to watch.

What To Look for in an Artificial Intelligence Penny Stock

Due to their nature, AI penny stocks are subject to significant price volatility, which requires traders to stay vigilant and responsive to market changes. These stocks require thorough research and due diligence, as the AI field is rapidly evolving and can significantly impact stock values.

When diving into AI penny stocks, it’s not just about spotting the right chart patterns or trading volumes. It’s about understanding the underlying technology and its market potential. Knowing what makes an AI company stand out can be the difference between a savvy trade and a shot in the dark. For a deeper dive into the critical factors that can signal a strong AI penny stock, this guide on what to look for in publicly traded AI companies’ stocks is an invaluable resource for traders aiming to make informed decisions.

Here’s the step-by-step:

Exhibits a Tradeable Pattern on its Stock Chart

First, look for a tradeable pattern on the stock chart. Patterns can give us insights into potential price movements. For example, a breakout pattern could indicate that the stock price is about to rise. But remember, patterns are not guarantees; they are just one tool we use to make trading decisions.

Is a Low-Float Stock

Second, consider whether the stock is a low-float stock. Low-float stocks have fewer shares available for trading, which can lead to higher volatility and potentially higher gains. But be careful, high volatility also means higher risk.

Exhibits an Unusual Trading Volume

Third, look for unusual trading volume. A sudden increase in trading volume could indicate that something significant is happening with the company, such as a new product launch or a major contract win.

Is a Former Runner

Fourth, check if the stock is a former runner. Former runners are stocks that have had significant price increases in the past. These stocks can potentially run again, providing opportunities for gains.

Gets Frequent Media Attention

Finally, pay attention to media coverage. Stocks that get frequent media attention can see increased investor interest, which can drive up the share price.

Where To Buy AI Penny Stocks

AI penny stocks may provide high return potential, but it’s crucial to understand where and how to engage with these investment opportunities. They are often less liquid than higher-priced stocks, making it essential to plan entry and exit strategies carefully.

There are several places where you can buy AI penny stocks.

NYSE/Nasdaq Penny Stocks

You can find AI penny stocks on major exchanges like the NYSE and Nasdaq. These stocks are subject to strict listing requirements, which can provide a certain level of security for investors.

OTC Penny Stocks

You can also find AI penny stocks on the Over-the-Counter (OTC) market. OTC stocks are not subject to the same listing requirements as NYSE/Nasdaq stocks, which can make them riskier. But remember, with higher risk comes the potential for higher returns.

The Best Place to Buy Tech Penny Stocks

The best place to buy tech penny stocks depends on your trading strategy and risk tolerance. Some traders prefer the security of NYSE/Nasdaq stocks, while others are willing to take on the risk of OTC stocks for the potential of higher returns.

10 Best AI Stocks for March 2024

My best AI stocks to watch are:

• NASDAQ: SMCI — Super Micro Computer, Inc — The Massive IRIS Swing Trade Winner
• NASDAQ: AXTI — AXT Inc. — The Next SMCI??
• NASDAQ: BMR — Beamr Imaging Ltd — The NVIDIA Partnership AI Stock
• NASDAQ: HOLO — MicroCloud Hologram Inc — The Meme Stock With an AI Pump in its Past
• NYSE: PLTR — Palantir Technologies Inc — The AI Stock Leader That’s Gaining on Results
• NASDAQ: NVDA — NVIDIA Corp — The AI Sector Leader With The Massive Earnings Jump
• NYSE: UBER — Uber Technologies Inc — The Self-Driving Swing Trade Stock
• NASDAQ: MSFT — Microsoft Corporation — The Underperforming AI Stock That Still Beat Earnings
• NASDAQ: CRWD — CrowdStrike Holdings, Inc — The AI Cybersecurity Stock IRIS Swing Trade Winner
• NYSE: ANET — Arista Networks, Inc — The High-Priced Data Center Earnings Winner Stock

AI was one of the hottest sectors in 2023…

My students have watched hot runners like AMST, PBTS, POAI and more. More importantly, they’ve managed to stay safe because they remember the rules of trading…

These companies are leveraging AI technology and analytics to drive growth and innovation. But remember, just because a company is in the AI sector doesn’t mean it’s a good investment. Always do your research and make informed trading decisions.

AI penny stocks can be part of a diversified investment portfolio, offering a balance between traditional investments and the cutting-edge technology sector. They benefit from advancements in AI technology, which can lead to significant growth as new applications are discovered and implemented.

Here’s the AI stock cheatsheet:

• What is the most promising AI stock?

A sector leader like NVIDIA Corp (NASDAQ: NVDA) is the best bet for the most promising AI stock. But remember, we’re traders, not investors. So the stocks on this list are ones we’re watching for short-term moves, not predictions of which will lead stock exchanges in 2030.

• What are the top 3 AI stocks to buy now?

My top 3 AI stocks to buy now (as long as their price action is strong) are Microsoft Corporation (NASDAQ: MSFT), Super Micro Computer, Inc (NASDAQ: SMCI), and CrowdStrike Holdings, Inc. (NASDAQ: CRWD).

• Which company is most advanced in AI?

NVIDIA is the most advanced publicly traded company in AI, that’s why it’s the sector leader. But other leading tech stocks like Apple, Microsoft, Google, and Facebook are all safe bets to pull ahead at some point.

• Which Artificial Intelligence stocks have a “Strong Buy” analyst rating?

Analysts tend to love these tech leaders — NVIDIA, Apple, Microsoft, Google, and Facebook. Most analysts have rated all of these stocks as “strong buys.”

Before you send in your orders, take note: I have NO plans to trade these stocks unless they fit my preferred setups. This is only a watchlist.

The best traders watch more than they trade. That’s what I’m trying to model in this article. Pay attention to the work that goes in, not the picks that come out.

Sign up for my NO-COST weekly watchlist to get my latest picks!

1. Super Micro Computer, Inc (NASDAQ: SMCI) — The Massive IRIS Swing Trade Winner

My first AI stock pick is Super Micro Computer, Inc (NASDAQ: SMCI).

The company announced positive earnings before its historic run past $1,000 this year.

I posted the news story below, followed by the SMCI chart.

Understand: I’m not going to trade SMCI at face value. The share price is too expensive.

Why I Like It

There’s a case to be made for options trading … SMCI is moving just like a volatile penny stock.

At the very least, I’m watching SMCI to keep an eye on one of the tech-sector leaders.

The larger market has an indirect relationship with our low-priced niche. When the larger market is hot, there are more plays for small-account traders. SMCI’s continued strength would signal continued strength among penny stock spikers as well.

I’m watching for low-priced AI plays that spike with positive earnings (read AXTI below for an example).

The AI sector is still in its infancy. There are expensive stocks pushing higher like SMCI, but some of these companies are only just now realizing profits. A full year after the AI boom started in early 2023 …

Be one the first to find the next AI spiker with solid financials: We’re covering these plays LIVE.

2. AXT Inc. (NASDAQ: AXTI) – The Next SMCI??

My second AI stock pick is AXT Inc. (NASDAQ: AXTI).

AXTI announced earnings in the afternoon on Thursday, February 22.

This is a direct excerpt from the earnings call:

“Sales grew 10% in the quarter with early signs of recovery in the power market and brand new demand related to artificial intelligence.”

– Dr. Morris Young, Chief Executive Officer of AXTI

Shares started to move during after-hours. And the spike continued into the end of the week. AXTI surged the whole day on February 23 and continued to run starting Monday, February 26.

Why I Like It

It already spiked 120% …

This stock reminds me of a lower-priced SMCI …

I’m not saying it’s going to run to $1,000. But the price similarly continues to push higher after a solid earnings announcement.

There’s an opportunity to profit on this multi-day runner. Pay attention to key levels and make sure to trade with a plan.

3. Beamr Imaging Ltd (NASDAQ: BMR) — The NVIDIA Partnership AI Stock

My third AI stock pick is Beamr Imaging Ltd (NASDAQ: BMR).

On February 12, at 7 A.M. Eastern during premarket hours, BMR announced a partnership with NVIDIA Corporation (NASDAQ: NVDA).

NVDA is arguably the most popular company in the world right now.

It’s surging to new heights as the tech sector scrambles for NVDA microchips. The massive tech stock is smashing company value records.

A hook-up with a sector leader like NVDA is HUGE news for a penny stock.

The share price spiked 1,500% in less than 24 hours after the announcement. Since then, the stock lost 70% of its value.

But there’s a possible squeeze brewing …

Why I Like It

It reminds me of another intense spiker that started running only a few days earlier on February 7.

MicroCloud Hologram Inc. (NASDAQ: HOLO) managed to spike 2,600% in less than 2 days.

The price slid lower, like BMR, but it consolidated for a few days and broke out to reach $98 per share!

That’s a total move of 6,400%.

Currently, BMR is consolidating above the recent lows despite a February 14 offering of 400,000 shares.

It’s not a 100% guarantee that BMR will push to new highs like HOLO did.

Nothing is guaranteed when it comes to the stock market.

But we know that volatile stocks can follow popular patterns.

If BMR breaks out, there’s a strategy we can use to trade the price action!

4. MicroCloud Hologram Inc (NASDAQ: HOLO) — The Meme Stock With an AI Pump in its Past

My fourth AI stock pick is MicroCloud Hologram Inc (NASDAQ: HOLO).

I mentioned HOLO earlier.

Here’s the backstory:

On February 7 at 5:20 A.M. Eastern, MicroCloud announced plans to join the Communications Industry Association.

That means absolutely nothing!

Nobody cares about the Communications Industry Association. At least the 360% stock pump in August and September of 2023 was linked to AI.

The Communications Association is a joke. That’s like if I announced that I was joining my neighborhood bowling league.

The price spiked 6,400% between February 6 and 16 as the result of a short squeeze.

Let me put that in perspective.

$1,000 of HOLO on February 6 would reach a max value of $64,900 on February 16.

But that’s the best-case scenario. We’re never going to time it perfectly.

Luckily we don’t need to. We focus on big low-priced spikers because there’s more room for error.

Why I Like It

We may see a price bounce on the back end of this spike. But I’m not likely to trade HOLO now that it’s so far from the recent highs at $98. There are likely still bagholders up there waiting to sell.

However, the short squeeze catalyst is alive and well in this 2024 market. And since patterns can repeat …

Study this price action and get ready for the next squeeze!

5. Palantir Technologies Inc (NYSE: PLTR) — The AI Stock Leader That’s Gaining on Results

My fifth AI stock pick is Palantir Technologies Inc (NYSE: PLTR).

The company works in the tech-defense sector.

Since the emergence of AI, there’s been growing concern about the technology’s utilization by scammers, criminals, and enemies to disrupt and prey on the larger society. And rightly so.

Thus, companies like PLTR have to increase the strength of their services to combat this risk. This niche is essential for the AI industry as a whole.

Why I Like It

The company announced in November that it secured 80 new deals in the third quarter of 2023. Each deal is valued at $1 million or more.

The price spiked up to $22. And that was the breakout level.

Then, on February 5 an earnings report came out while the market was closed. The next day, prices gapped up 20% and continued the spike to an impressive 50% in the following days.

Prices dipped a bit after the breakout. But we can already see support forming in the low $20’s as the price consolidates.

Consolidation is a hint the price could continue higher.

6. NVIDIA Corp (NASDAQ: NVDA) — The AI Sector Leader With The Massive Earnings Jump

My sixth AI stock pick is NVIDIA Corp (NASDAQ: NVDA).

NVDA is the AI sector leader.

There’s a huge demand for NVDA’s microchips due to the AI advancement and resulting tech boom.

The company continues to smash earnings expectations and the stock is soaring past other big names like Meta Platforms Inc. (NASDAQ: META) and Alphabet Inc. (NASDAQ: GOOG).

On February 21 during after-hours, NVDA posted Q4 data that showed an EPS of $5.16 ($0.52 cents higher than expected) and a revenue of $22.1 billion ($1.55 billion more than expected).

The resulting gap up brought the whole market with it.

Take a look at the NVDA chart below followed by the S&P 500 ETF Trust (NYSE: SPY).

This stock single-handedly lifted the market to new all-time highs.

That’s mental.

Why I Like It

NVDA is a great gauge to evaluate the AI sector’s strength.

When NVDA spikes, we’re more likely to see strong AI plays in the small-cap market.

You could buy shares of NVDA if you’d like, but they’re over $700 a piece right now …

For small-account traders, it’s more advantageous to find low-priced runners with ties to the NVDA-AI momentum. That’s because the prices spike higher from a percentage perspective.

So, thanks to the low price, we can load up on shares and ride the percent gain for HUGE potential profits.

The stocks are volatile and prone to pullbacks. But those who are wise to the price action can ride the momentum before things turn sketchy.

Keep an eye on NVDA and use the momentum to track the next AI spiker.

7. Uber Technologies Inc (NYSE: UBER) — The Self-Driving Swing Trade Stock

My seventh AI stock pick is Uber Technologies Inc (NYSE: UBER).

Uber took a hit during the inflation squeeze and tech sell-off in 2020 and 2021.

But, like the rest of the tech sector, AI’s emergence in 2023 resulted in a stock rally and new all-time highs in 2024.

The company uses AI to connect drivers with riders more seamlessly. Uber also has autonomous vehicles to chauffeur passengers and deliver products.

Why I Like It

The stock continues to push higher in 2024.

Most recently, on February 14 it announced a plan to repurchase $7 billion worth of shares.

Share repurchases are often bullish announcements. It shows the company’s confidence in the stock’s prospects.

Uber isn’t a penny stock by any means. But it’s far less expensive than other tech stocks surging right now.

This could be a great swing trade opportunity for anyone interested.

8. Arista Networks, Inc (NYSE: ANET) — The High-Priced Data Center Earnings Winner Stock

My eighth AI stock pick is Arista Networks, Inc (NYSE: ANET).

We live in interesting times …

ANET is another profitable company that’s surging thanks to AI. But when it announced earnings on February 12, prices fell from the all-time highs.

This is a perfect example of the rule that we use in trading: Buy the rumor, sell the news.

You never know what will happen when a company announces news that everyone is anticipating. Here’s what I mean:

Everyone knew that ANET was going to announce earnings on February 12. As a result, a lot of people bought shares in anticipation.

When the stock announced decent data, it was good but not great. And every one who would have bought already did.

Thus, there were only sellers left when the earnings dropped.

Take a look:

Why I Like It

The earnings data was still bullish.

For Q4 of 2023, the company reported:

• EPS of $2.08 ($0.37 higher than expected).
• Revenue of $1.54 billion (in line with expectations).

ANET didn’t outperform revenue expectations. But it’s still a profitable tech company in the middle of a bull market fueled by tech surges.

9. Microsoft Corporation (NASDAQ: MSFT) — The Underperforming AI Stock That Still Beat Earnings

My ninth AI stock pick is Microsoft Corporation (NASDAQ: MSFT).

This is another profitable tech stock that didn’t outperform expectations.

And as a result, share prices took a bit of a hit. There’s a chart below with the January 30 earnings announcement circled.

Why I Like It

MSFT is deeply involved with the AI industry.

One example is Copilot, the company’s AI tool capable of speeding up work processes across all of Microsoft’s existing apps.

The company is also continuing to cut costs by laying off inefficient members of its workforce.

In January Microsoft let go of 1,900 employees at its Activision Blizzard and Xbox businesses.

Layoffs can be a gruesome part of business. But if it helps trim the overall cost, employee restructuring can help to boost gross profits.

10. CrowdStrike Holdings, Inc (NASDAQ: CRWD) — The AI Cybersecurity Stock IRIS Swing Trade Winner

My tenth AI stock pick is CrowdStrike Holdings, Inc (NASDAQ: CRWD).

This is another cybersecurity company at the center of the AI industry.

Since the emergence of AI in 2023, there’s a growing risk of cyber attacks from individuals using AI for nefarious purposes. We spoke about this a bit when we discussed PLTR.

As a result, cybersecurity companies have to evolve to meet this oncoming risk.

Why I Like It

CRWD is one of the most popular cybersecurity companies in the market.

But most analysts refer to Palo Alto Networks Inc. (NASDAQ: PANW) as the sector leader.

As a result, when PANW took a nasty dip on February 21, CRWD followed suit out of sympathy.

Our AI IRIS tool noted a possible swing trade opportunity on CRWD as a result. The price fell 15% on February 21, but it was a sympathy move.

And so far prices have rallied 20%.

Pay attention to WHY prices are moving.

AI Stocks Under $5

The allure of hot sector stocks, especially when they’re also penny stocks, is undeniable. These stocks present a unique blend of opportunity and volatility. The AI industry is booming, with advancements and applications spreading across various sectors, from healthcare to finance, making AI stocks a magnet for investors looking for the next big thing. The gains here can be proportionately greater than those from more established stocks, mainly because even minor positive news or advancements can send their prices soaring.

However, it’s crucial to approach these opportunities with a clear strategy and an understanding of the risks involved. The volatility of penny stocks, combined with the speculative nature of AI ventures, means that while the potential for rapid gains is significant, the risk of losses is equally high. Conduct thorough research, looking beyond the hype. And never invest in these stocks — only trade them.

Remember, the key to success in trading AI stocks under $5 is not just about jumping on every opportunity but being selective and strategic. It’s about leveraging the explosive potential of the AI sector while managing risk meticulously. By focusing on companies with the potential to lead in their niche, traders can capitalize on the disproportionate gains that these penny stocks offer, all while keeping their investment strategy tight and cutting losses quickly.

Key Takeaways

Trading AI penny stocks can offer opportunities for gains, but it also comes with risks. As traders, we need to understand these risks and make informed decisions. We don’t just blindly invest in AI stocks; we trade them based on patterns, data, and market insights. And remember, small gains add up. Don’t get caught up in the hype of AI; focus on the facts, the data, and the patterns. That’s how we trade AI penny stocks.

Key points:

• Investing in AI penny stocks can be risky due to lack of company information, making transparency and communication key factors to consider.
• These stocks could experience rapid growth with AI sector advancement, positioning them as attractive for those looking to capitalize on technological trends.
• AI penny stocks are influenced by technological developments and patents, which can dramatically alter their trajectory and market value.

These stocks follow the rules of all hot sectors. They’re good for trading because they’re hot…

That’s the same thing that makes them dangerous when their sector cools down.

It isn’t enough to form a thesis on which stocks to buy. Making a profit depends on a good trading plan.

And that depends on your stock research and analysis tools.

I use StocksToTrade to scan for news, tweets, earning reports, and more — all covered in its powerful news scanner.

It has the trading indicators, dynamic charts, and stock screening capabilities that traders like me look for in a platform. It also has a selection of add-on alerts services, so you can stay ahead of the curve.

Grab your 14-day StocksToTrade trial today — it’s only $7!

Trading can be dangerous. Most traders lose money.

A 2019 study called “Day Trading for a Living?” looked at the success rates of Brazilian traders over a 2-year window, and found that 97% of traders with more than 300 days of active trading lost money. Only 1.1% earned more than the Brazilian minimum wage — that’s only $16 per day!

If you want to be part of the 1%, make sure you outwork the rest!

What AI penny stocks do you have on your watchlist? Let me know in the comments!

FAQs

How can AI platforms like ChatGPT contribute to the growth of penny stocks in the AI industry?

AI platforms like ChatGPT and related applications are driving significant innovation in various industries. The growing demand from customers for AI-driven solutions is leading to increased market cap and revenues for companies in the AI space, including those whose shares are classified as penny stocks.

Where can I find the latest news and information about AI penny stocks?

For the latest news and market updates on AI penny stocks, you can explore our markets section. It provides in-depth content, links to reliable sources, and recent results related to AI companies and their stocks.

How can I assess the value of an AI penny stock?

The value of AI penny stocks can be assessed by evaluating several factors. These include demand for AI solutions, people involved in the company, and its market cap. Revenue, earnings, and momentum of the stock in the market are also crucial considerations.

When should I consider selling my AI penny stocks?

Deciding when to sell your AI penny stocks involves evaluating your profit margins and market conditions. It’s generally a good idea to sell if you’ve achieved your desired profit or if there are signs of a downturn in the market. Always consult with a financial advisor to make the most informed decisions.