Every savvy investor is looking for that golden opportunity in the dawn of the artificial intelligence age. It’s projected that by 2030, AI could potentially infuse a whopping $15.7 trillion into the global financial fabric. Of course, tech behemoths are already catching the limelight, but the underdogs often surprise us with staggering outcomes. Hence, wagering on the top undervalued AI penny stocks remains as relevant as ever.
While those blue-chip giants will undeniably remain formidable assets for the long haul, the real intrigue lies in emerging AI-driven small caps. These budding contenders may not be boasting hefty top-line growth today but are poised to seize that enviable first-mover edge potentially. Moreover, their unique positioning can make them irresistible as acquisition prospects. So, for those eager to ride the transformative wave of AI, here are three leading AI penny stocks that hold moon-shot potential.
Rekor Systems (REKR)
Rekor Systems (NASDAQ:REKR) is a prime example of innovation meeting practicality in the AI realm. At a humble valuation, this trailblazing firm harnesses the power of AI and machine learning to address infrastructure challenges. Its foray into Roadway Intelligence, aimed at curtailing uninsured driving, has already showcased its potency. For instance, thanks to Rekor’s efforts in Oklahoma, the state witnessed a commendable drop in uninsured motorists by a staggering 100,000 to date.
Financially, Rekor’s recent performance speaks volumes. The company had hinted at an expected second quarter revenue surge of over 110% year-over-year but surpassed those projections handsomely. In the second-quarter, it delivered a robust $8.56 million in sales, a 131.4% bump from the prior-year period, beating estimates by a cool $0.53 million. While the company sails on hyper-growth currents, potentially compromising short-term profitability, analysts from Seeking Alpha paint an optimistic future, predicting its negative EBITDA of 66 cents this year will slim down to just 32 cents come 2024.
Steering into the spotlight, BigBear.AI (NYSE:BBAI) aims to revolutionize the defense and industrial sectors with its cutting-edge AI-powered analytics and cyber engineering solutions. Having bagged notable, noteworthy contracts from the U.S. Army, the Defense Intelligence Agency, and a slew of other logistics and shipping magnates, it’s clear that BigBear.ai is a formidable player in its specialized domain.
Come May, the company launched a registered direct offering. With the sale of 11.84 million shares and warrants for an additional 8.88 million shares priced at a competitive $2.11 each, the infusion of liquidity couldn’t be timelier.
Furthermore, investment research firm H.C. Wainwright recently initiated coverage on BigBear.ai, slapping it with a promising “buy” rating and projecting a $4 price target. With a staggering backlog north of $206 million from esteemed clients, H.C. Wainwright’s advice to snap up BBAI shares is backed by promising revenue predictions for 2024.
SoundHound AI (SOUN)
SoundHound AI (NASDAQ:SOUN) continues to make waves in the tech sphere, particularly with its ambition to integrate voice assistants into a plethora of vehicles, pushing the boundaries in the burgeoning automotive space. While it’s a high-risk, high-reward stock, SoundHound AI’s robust business model is hard to overlook.
With a resume boasting partnerships with tech titans such as Microsoft (NASDAQ:MSFT) and Block (NYSE:SQ), SoundHound AI’s reach is undeniably vast, with a tantalizing addressable market cap of $160 billion. Its recent financials paint an encouraging picture, a commendable 42% year-over-year revenue growth juxtaposed with a 28% year-over-year reduction in net loss. It’s also worth noting that while the stock dipped by over 32% in the past year, it has showcased an impressive comeback, almost doubling year-to-date.
Furthermore, renowned Wedbush analyst Dan Ives recently stamped an ‘outperform’ rating on SoundHound AI, setting a bullish $7 price target.
On the date of publication, Muslim Farooque 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