Artificial intelligence, or AI, is already being used by many industries and companies. Among the diverse sectors making use of the technology are banks, online search engines, drugmakers, Tesla (NASDAQ:TSLA) and farm-equipment maker Deere (NYSE:DE). With AI proliferating the business world so tremendously, AI penny stocks can easily make small investors millionaires.
Just take a look at the market capitalizations of some AI-focused companies. Palantir (NYSE:PLTR) has a market capitalization of $44.5 billion; Schrodinger’s (NASDAQ:SDGR) comes in at $5 billion; C3.ai (NYSE:AI) weighs in at nearly $7 billion; and Upstart’s (NASDAQ:UPST) market capitalization is $12.5 billion.
Given these numbers, it’s very possible for AI penny stocks with market capitalizations of $500 million or less to surge 1,000% or more within several years. Therefore, here are four AI penny stocks that I believe can do just that.
AI Penny Stocks: Predictive Oncology (POAI)
Predictive Oncology “is a data and AI-driven discovery services company that provides predictive models of tumor drug response.”
One of Predictive Oncology’s subsidiaries, TumorGenesis, utilizes specific, highly differentiated media in which it grows ovarian cancer cells, and a database of 98 different types of ovarian cancer cells. With these tools, it identifies specific types of tumors and uses that information to create treatments tailored to each patient.
Currently focusing on ovarian cancer, TumorGenesis last year sold “its unique ovarian cancer cell culture media … to a top rated medical university in the New England area for research in isolating and growing ovarian cancer cells.”
Just last month, TumorGenesis announced an alliance with Swedish company Cellevate AB. TumorGenesis indicated that the partners would work to help identify promising targets within tumors, thereby making the development of cancer drugs cheaper and more efficient.
Another Predictive Oncology subsidiary, Helomics, uses AI and its extensive tumor database to test potential cancer drugs “much earlier in the drug discovery process” than usual.
Furthermore, in 2020, Predictive Oncology had revenues of $1.25 million and a gross profit of $805,000. Its market capitalization is $70 million.
Laix (LAIX)
Laix uses “an AI teacher” to enable students to learn English. The AI teacher can “hear, understand, interact with and evaluate the performance of our users,” the company has stated.
Earlier this year, InvestorPlace reporter William White noted that Laix seeks to make teaching more cost-effective. Indeed, to the extent that the company’s product can effectively teach students, it will save governments, parents and taxpayers around the world a great deal of money.
In Q1, Laix’s net income was $1.9 million, or 12.2 million RMB, versus its 34.7 million RMB net loss during the same period a year earlier. The news sent LAIX stock soaring.
AI Penny Stocks: Innodata (INOD)
After opening this morning at $6.30, Innodata is slightly above the usual $5 limit for penny stocks. But since its market capitalization is a fairly low $170 million and I was intrigued by its products, I decided to include it in this article.
Innodata develops “synthetic data,” which simulates actual data, for use by AI companies. The company says that its product “quickly sources and creates synthetic data across a vast variety of document types and languages.” It also says that its data is very accurate and reduces bias.
Innodata recently announced that it had won a deal with a top robot process automation company to assist with the creation of “high-performing AI models, or intelligent software bots, that can perform across a range of financial documents in five languages.”
In 2020, Innodata’s revenue came in at $58.24 million, up from $55.86 million in 2019. Further, its operating income rose to $1.18 million in 2020 from -$477,000 in 2019.
Remark (MARK)
As I noted in a column from June 29, 2020, Remark’s facial recognition cameras could help law enforcement, while “schools in China are using Remark’s technology to quickly ensure that every child who’s supposed to be in school is indeed there.” What’s more, many other entities, such as large factories could use the technology to ensure that all of their employees are present. And consumers can use Remark’s systems to check the length of lines at their local stores. Finally, the company has developed a system that cuts power consumption by up to 50% over the long term.
As a bonus, Remark expects to obtain a significant amount of liquidity soon by selling its stake in telehealth company Sharecare, which is slated to become publicly traded through a merger with Falcon Capital Acquisition Corp (NASDAQ:FCAC), a SPAC (special purpose acquisition company). In February, the merger placed a $3.9 billion valuation on Sharecare. As of last August, Remark reported that it owned a 4.5% stake in Sharecare.
In its last earnings conference call, Remark said that it was poised to win a deal with a “smart traffic highway” operator in China that will use Remark’s system to monitor its road. Remark is also providing “AI products” to a top resort company for the 2022 Winter Olympics and says it’s well-positioned to benefit from President Joe Biden’s infrastructure plan.
In Q1, Remark’s top line jumped to $4.4 million, versus $400,000 during the same period a year earlier.
On the date of publication, Larry Ramer held long positions in Remark and Schrodinger. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Larry Ramer has conducted research and written articles on U.S. stocks for 13 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been GE, solar stocks, and Snap. You can reach him on StockTwits at @larryramer.
