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The 3 Most Undervalued AI Penny Stocks to Buy: November 2023


  • Top AI penny stocks to buy and hold now will set you up for the future.
  • SoundHound AI (SOUN): It has a 2026 total addressable market of about $160 billion.
  • Nerdy Inc. (NRDY): Recent weakness at triple bottom support is an opportunity to buy.
  • BigBear.ai Holdings (BBAI): It just posted its first quarter of positive cash from operations.
undervalued AI penny stocks - The 3 Most Undervalued AI Penny Stocks to Buy: November 2023

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Artificial intelligence (AI) has been a massive game-changer for tech giants. And for a brief period of time, so have AI penny stocks. In fact, since 2023 began, some of the biggest U.S. tech firms added nearly $2.4 trillion to their market caps thanks to AI buzz.

For example, Nvidia (NASDAQ:NVDA) started the year close to $142. It’s now up to $483.35 with a market cap of $1.19 trillion. Microsoft (NASDAQ:MSFT) exploded from about $240 to $370 and is now worth $2.75 trillion. Even companies like Palantir (NYSE:PLTR) jumped from about $6.40 to $19.67, and now carries a market cap of just above $42.7 billion. 

Moving forward, we expect to see even more growth, not only in large cap names but also in penny stocks. All are within the AI market. Further, it’s currently valued at nearly $100 billion with the potential to grow about $2 trillion, according to Next Move Strategy Consulting. 

Let’s examine a few hot AI penny stocks that could see big upside.

SoundHound AI (SOUN)

A sign for SoundHound AI (SOUN) out front of an office building.
Source: Tada Images / Shutterstock.com

SoundHound AI (NASDAQ:SOUN) traded at $2.70 on April 10. Shortly after, it would soar to about $5.11, and now stands at $1.78. Significant upside ahead is possible. 

First, the company claims a 2026 total addressable market of close to $160 billion. Next, SOUN revenue has been growing at about a 40% clip year over year (YOY). Finally, it’s already doing business with heavyweights like Oracle (NYSE:ORCL), Toast (NYSE:TOST), Block (NYSE:SQ), Hyundai (OTCMKTS:HYMTF), and Samsung

Additionally, it deployed its pilot Chat AI with DS Automobiles, a Stellantis (NYSE:STLA) brand. Impressively, it just ended its third quarter with $342 million in bookings backlog YOY.

Earnings have been just as impressive. Revenue jumped 19% YOY to $13.3 million. Its GAAP operating income of $14.4 million improved by 46% YOY. Its GAAP net income loss of $20.2 million improved 33% YOY. And, its GAAP EPS loss of nine cents was a 40% improvement YOY as well.

Nerdy Inc. (NRDY)

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Source: whiteMocca / Shutterstock.com

Back on Feb. 21, Nerdy Inc. (NYSE:NRDY) was trading at $2.50. Starting out strong, it tested a high of $5.25 a few months later, then faded and died. Now trading at $2.50 again, it presents as a good long-term opportunity.

Revenue growth is improving, as evidenced in its third quarter with $40.3 million coming in above the high end of guidance. Also, it was up about 27% YOY. Gross profit of $29.2 million was up 33% year over year, as well. NRDY noted that 100% of its consumer customers are buying learning memberships.

Moving forward, NRDY expects to see revenue in a range of $54 million to $56 million, or 32% at midpoint for the fourth quarter. For the full-year, the company expects to see revenue of between $192 million and $194 million, or 19% at midpoint. And more upside is likely ahead with revenues and demand set to expand.

BigBear.ai Holdings (BBAI)

A stock image of a brain with the letters AI. best AI stocks
Source: shutterstock

Another hot AI penny stock to keep an eye on is BigBear.ai Holdings (NYSE:BBAI), which traded at $3.50 in February. While it would go on to test $3.74, it also faded. Last trading at $1.56, it is showing signs of life, though. 

Furthermore, analysts at HC Wainwright initiated coverage of BBAI with a buy rating and a $4 price target.

“The analysts said that the company’s AI-powered decision intelligence solutions address the needs of three primary markets — supply chains and logistics, cybersecurity, and autonomous systems,” according to Seeking Alpha. “With an existing backlog surpassing $206.0M, a customer base consisting of recognized commercial and government entities, the analysts believe BigBear.ai is positioned to be a leader in the growing field of AI driven data analytics.”

Recently, BBAI posted its first quarter of positive cash from operations, net income, and positive adjusted EBITDA. Also, it reiterated its revenue guidance range of between $155 million and $170 million.

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Read More: Penny Stocks — How to Profit Without Getting Scammed

On the date of publication, Ian Cooper did not have (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Ian Cooper, a contributor to InvestorPlace.com, has been analyzing stocks and options for web-based advisories since 1999.

Article printed from InvestorPlace Media, https://investorplace.com/2023/11/the-3-most-undervalued-ai-penny-stocks-to-buy-november-2023/.

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