Artificial intelligence has undeniably created a buzz around every nook & corner of the world, with countless opportunities emerging across every sector. While many of the industry’s leading players boast impressive valuations, investors seeking more affordable entry points need not look away.
Some AI-focused companies with share prices under $5 exist, presenting a potentially intriguing landscape for budget-conscious individuals looking to capitalize on the AI boom.
Overview of the AI Industry
Artificial intelligence (AI) has swiftly evolved from a futuristic term to a vital component of our daily lives. AI technologies are transforming industries and boosting innovation, from personalized shopping experiences to advanced medical diagnostics.
According to a Grand View Research, Inc. report, the global artificial intelligence market is experiencing explosive growth. It is projected to reach USD1,811.75 billion by 2030, representing a remarkable compound annual growth rate (CAGR) of 36.6% from 2024 to 2030.
Increasing investments, technological advancements, and the rising demand for AI-powered applications across various sectors fuel this remarkable growth. This propels investors to invest in AI stocks with a vision to receive promising returns and long-term growth.
Let’s examine the good AI stocks and why investors should invest in AI stocks under $5.
Why Invest in AI Stocks Under $5?
Investment of $5 in AI stocks offers unique advantages, particularly for investors with limited capital looking to diversify their portfolios. If chosen wisely, these stocks can provide substantial returns, for example:
High Growth Potential
While top AI stocks may offer stability, smaller AI stocks provide significant growth opportunities. Investing in emerging players can yield impressive returns as they capitalize on the growing demand for AI solutions.
Affordability and Accessibility
Stocks priced under $5 are more available to a broader range of investors, including those with limited funds. This affordability allows investors to acquire more shares and diversify their portfolios without committing substantial capital.
Long-Term Investment Potential
Many AI stocks under $5 are still in the early stages of development. These companies may have promising technologies and innovative solutions that have yet to realize their market potential fully.
By investing in these AI stocks, investors can position themselves for long-term growth as these companies mature and their technologies gain wider adoption.
We understand that these $5 stocks offer these benefits. Now, let’s discuss in detail which stocks are good to invest in!
Top AI Stocks Under $5 to Invest
Are you looking to invest in AI and machine learning stocks without spending more than $5 per share? Here are some of the top AI stocks under $5 that investors should consider for their long-term growth potential:
Rekor Systems Inc.
Rekor Systems Inc. (NASDAQ: REKR) is leveraging AI to revolutionize transportation management and public safety.
The company’s “roadway intelligence” platform aggregates data from over 30,000 sites and millions of vehicles to provide actionable insights for government and commercial clients. Rekor aims to improve community infrastructure and safety by understanding traffic patterns and identifying potential issues.
While the stock has faced volatility, with a year-to-date decline of 38%, it has also shown significant growth, surging nearly 53% for the year.
Analysts maintain a “strong-buy” rating on the stock, with a 12-month price target of $4.50. Rekor’s recent underwritten public offering of 1.5 million shares is expected to net $3.5 million, providing additional financial resources for growth initiatives.
Nerdy Inc. (NRDY)
Nerdy Inc. (NYSE: NRDY) is a leading online learning platform that leverages AI to personalize education across 3,000+ subjects. The company offers one-on-one, small-group, and large-group learning experiences for individuals and institutions alike.
While Nerdy’s stock price has faced challenges, closing at $2.99 per share on March 15 and down approximately 13% year-to-date, analysts remain optimistic.
Price targets for the following year range from $3.25 to $6.00, with an average of $4.58, suggesting potential upside. Despite a dip in net income, the company’s 19% revenue growth in 2023 has solidified its position as a “buy” among analysts.
FiscalNote Holdings Inc.
FiscalNote (NYSE: NOTE) is carving a niche in the AI space, empowering organizations to navigate complex political, regulatory, and corporate landscapes. Leveraging AI technology, data, and insightful content, they equip over 5,000 clients with a strategic edge.
Despite net losses of $51 million in 2023, FiscalNote’s revenue continues to climb, up 17% year-over-year. The recent sale of Board.org, a non-core asset, further bolstered their cash by $15 million.
Wall Street seems bullish, with analysts setting an average price target of $3.60, more than double the March 15th closing price of $1.75. Their resounding recommendation? Buy.
Ideanomics Inc.
Ideanomics (NASDAQ: IDEX) is a global player in the electrification of commercial vehicles. The company’s focus on charging technology and electric work trucks, tractors, and motorcycles positions it at the forefront of the EV revolution.
However, it’s crucial to approach this investment with caution. Ideanomics’ share price has experienced extreme volatility, trading near its 52-week low and a fraction of its all-time high. While recent recommendations and increased hedge fund interest are noteworthy, the company’s financial health and market performance warrant scrutiny before investing.
BigBear.ai Holdings Inc.
BigBear.ai Holdings (NYSE: BBAI) strengthens its AI arsenal by acquiring Pangiam. This leader in AI-powered decision intelligence solutions for government and commercial clients across three key areas—global supply chain and logistics, autonomous systems, and cybersecurity—recently announced the successful all-stock acquisition of Pangiam.
Pangiam, a facial recognition and advanced biometrics company, bolsters BigBear.ai’s offerings with a full-vision AI portfolio encompassing near and far-field applications. This strategic move positions BigBear.ai to be a more comprehensive player in the AI landscape.
Key Considerations for Investors
Thoroughly research the company’s financial status, business model, and market potential to make informed decisions.
Be prepared for price fluctuations, as stocks under $5 tend to be more volatile.
Maintain a long-term investment horizon, as these companies may take time to realize their full potential.
Conclusion
AI stocks are experiencing rapid growth, with many established companies commanding substantial valuations. While this presents exciting opportunities, investors seeking more affordable entry points may consider exploring companies with share prices below $5.
These stocks can offer potential upside but also carry heightened risk. Thorough research and consideration of these investments as part of a diversified portfolio are essential.
