Are you on the hunt for the best AI stocks to buy in 2024? You’re not alone. Artificial intelligence (AI) is currently one of the hottest trends in the market, and many companies in this sector have experienced significant growth. But as AI stocks continue their parabolic rise, finding affordable options under $10 can be a real challenge.
In this article, we’re going to explore the world of AI stocks, why they’ve taken the market by storm, and introduce you to our top picks for AI stocks that won’t break the bank. But before we dive into the stock recommendations, let’s take a quick look at the rise of AI in the market.
The Ever-Changing Landscape of Investment Themes
Each year brings a new investment theme that captures the market’s attention. In 2019, it was all about tech, with companies like AMD and Lam Research scoring significant gains. In 2020, blockchain was the buzzword, and companies adding “Bit” or “blockchain” to their names saw tremendous growth. Meme stocks, led by GameStop, took center stage in 2021, and inflation was the focus in 2022.
Now, in 2024, the dominant theme is artificial intelligence, with NVIDIA leading the way as the top AI stock. The interest in AI soared when ChatGPT made its debut, prompting many companies to integrate AI tools into their platforms. AI has proven its worth across various sectors, from robotics and healthcare to automobiles and wealth management.
But as the share prices of large-cap stocks like NVIDIA become overextended and momentum slows down, it might be time to consider under-the-radar AI stocks that could offer significant upside. If you’re a retail investor with a modest account balance, you might be particularly interested in AI stocks priced under $10.
Why Invest in AI Stocks?
Before we delve into the list of our favorite AI stocks under $10, let’s discuss why investing in AI stocks can be a smart move:
1. Massive Expected Growth
- According to Next Move Strategy Consulting, the global AI market is projected to exceed $1.8 trillion by 2030, with a staggering compound annual growth rate of nearly 33%.
2. Versatility Across Industries
- Private investments in AI technology have surged in various sectors, including healthcare, data management, fintech, and cybersecurity, each seeing investments of $5 billion or more in AI technology and products in 2022.
3. Swift Adoption Rates
- AI is advancing rapidly, with a 2024 Statista survey revealing that over a quarter of young professionals, including Gen X, Gen Z, and millennials, are already using generative AI tools like ChatGPT in their jobs.
The 8 Best AI Stocks Under $10
Now, let’s get to the heart of the matter. Here are our top picks for AI stocks under $10 that you can consider investing in. It’s essential to note that stocks priced under $10 often belong to small or microcap companies, which can be more volatile. Make sure to assess your investment goals and risk tolerance before diving in.
1. Nio Inc. (NIO)
- Industry: Electric vehicles
- Market cap: $19.6 billion
- Average price target: $13.31
Electric vehicle manufacturers are considered some of the best AI companies to invest in. While Tesla often grabs the headlines, smaller Chinese manufacturer Nio is gaining traction in the United States and Europe. Nio produces smart vehicles with both traditional and autonomous driving features, including the development of a fully autonomous station wagon called the Eve.
With a market cap of over $19 billion, Nio is the largest company on our list and recently passed the 200,000 vehicle sales mark. Analyst consensus currently has a “hold” rating on the stock, but the average price target of $13.31 represents an upside of more than 16%. NIO shares are our top choice for AI stocks under $10.
2. FiscalNote Holdings Inc. (NOTE)
- Industry: Business services
- Market cap: $383.7 million
- Average price target: $8.35
FiscalNote Holdings is a small tech firm with a unique niche, serving Fortune 100 companies, law firms, and government agencies. Using AI, machine learning, analytics, and peer research, FiscalNote helps clients manage policy and regulatory developments, stay updated on current news and events, and organize advocacy campaigns.
The stock is favored by analysts, with six “buy” ratings versus one “hold,” and both company insiders and institutions have been accumulating shares over the last 12 months.
3. SoundHound AI Inc. (SOUN)
- Industry: Software
- Market cap: $518.5 million
- Average price target: $4.35
SoundHound AI is a Santa Clara-based tech firm specializing in voice-enabled products powered by AI applications. Their flagship product, Houndify, allows customers to create conversational AI voice assistants, customized through automatic speech recognition and embedded solutions.
SoundHound has a “buy” rating from the only analysis firm covering it (Canter Fitzgerald), and institutions have acquired over $100 million worth of shares in the last 12 months, significant for a company with a market cap under $500 million.
4. Nerdy Inc. (NRDY)
- Industry: Education services
- Market cap: $708.4 million
- Average price target: $5.67
Nerdy Inc. operates an online learning platform that utilizes proprietary AI technology to create a marketplace for learners and educators. With over 3,000 lesson subjects and various teaching styles, Nerdy connects students, parents, and educators seamlessly.
In August, four stock analysts increased their price targets on NRDY shares, with an average upside of 36.4% over the current market price. Institutions have also acquired shares over the last 12 months, with new inflows totaling $145 million.
5. Rekor Systems Inc. (REKR)
- Industry: Software
- Market cap: $209.6 million
- Average price target: $3.88
Rekor Systems, based in Maryland, uses AI technology to address transportation management and public safety challenges. Their products include the Rekor One intelligent roadway platform and Rekor Command, which provides applications to traffic centers, first responders, and freeway patrol units.
Despite being incorporated just six years ago, Rekor has garnered institutional attention and accumulated a market cap of $200 million.
6. Lantronix Inc. (LTRX)
- Industry: Computer equipment
- Market cap: $143.2 million
- Average price target: $9.33
Lantronix employs AI-powered computer equipment and software to provide solutions for the Internet of Things (IoT). Clients can use this technology for remote environmental management, video surveillance, robotics, traffic management, and edge computing.
With “buy” ratings from analysts, LTRX shares have an average price target indicating a 137% upside potential.
7. AudioEye Inc. (AEYE)
- Industry: Software
- Market cap: $55.7 million
- Average price target: $9
AudioEye provides accessibility solutions using AI technology and software to transform content into an accessible format for users with disabilities. All three analysts covering AEYE have a “buy” rating on the stock, with an average price target indicating an upside potential of over 90%.
8. Lantern Pharma Inc. (LTRN)
- Industry: Pharmaceuticals
- Market cap: $50.1 million
- Average price target: $11
The smallest of our top AI stocks, Lantern Pharma, is a clinical-stage biotech company based in Dallas, Texas. Despite its size, Lantern has shown potential by using AI and machine learning to streamline drug development, especially in cancer treatment.
Analysts have a “buy” rating on the stock, with an $11 price target representing a 155% upside.
AI Technology Stocks Have Promise, but Smaller Firms Contain Larger Risks
Artificial intelligence is undoubtedly a market theme to remember over the next few years. However, finding those rare gems among small-cap stocks can be challenging. Large-cap companies like NVIDIA and Microsoft have dominated the industry, making it tough for smaller startups to compete effectively.
Investing in affordable AI stocks under $10 requires conviction, as many small and microcap companies may fail or face stiff competition from larger players. Remember, just because a stock is inexpensive doesn’t guarantee significant potential upside. Vigorous research is essential, and be prepared to act when you spot the first red flag.
Methodology: How We Chose the Top AI Stocks Under $10
To make it onto our list of the best AI stocks under $10, each company had to utilize AI, machine learning, or automated computer technology to create a product or service. Additionally, they had to meet at least three of the following criteria:
- Listed on a major exchange (NYSE, NASDAQ, BATS, TSX, etc.)
- Earnings estimates accelerating
- Expanding analyst coverage
- Average price target above the current price
- Insiders accumulating shares
FAQ’S
1. What Are AI Stocks?
AI stocks are shares in companies that operate in the field of artificial intelligence. These companies leverage AI and machine learning technologies to develop products and services that enhance various industries, from healthcare and finance to automotive and education. Investing in AI stocks allows you to potentially benefit from the growth of this transformative technology sector.
2. Why Consider AI Stocks Under $10?
AI stocks priced under $10 offer an affordable entry point for retail investors. While larger AI companies like NVIDIA dominate the market, smaller firms can provide opportunities for significant growth. These stocks may be more volatile, but they also have the potential for substantial upside, making them appealing to investors with limited capital.
3. Are AI Stocks Risky Investments?
Like all investments, AI stocks come with risks. Stocks priced under $10 are often associated with higher volatility, and smaller companies may face increased competition. Additionally, the AI industry is rapidly evolving, and companies need to stay innovative to remain competitive. It’s crucial to assess your risk tolerance and conduct thorough research before investing in AI stocks.
4. How Can I Research AI Stocks?
Researching AI stocks involves a combination of fundamental analysis and market research. You can start by examining a company’s financials, such as revenue, earnings, and debt levels. Additionally, look at its growth prospects, competitive positioning, and management team. Keep an eye on news and developments within the AI industry to stay informed about potential market trends.
5. What Should I Consider Before Investing in AI Stocks Under $10?
Before investing in AI stocks under $10, consider your investment goals, risk tolerance, and time horizon. Evaluate the company’s fundamentals, growth potential, and competitive landscape. Diversify your investment portfolio to spread risk, and consider consulting with a financial advisor for personalized guidance. Remember that investing always carries inherent risks, so make informed decisions that align with your financial objectives.
Investing in AI stocks can be a rewarding venture, but it’s essential to approach it with caution and a well-researched strategy. If you have any more questions or need further information, feel free to reach out to a financial advisor for personalized guidance tailored to your specific circumstances. Happy investing!
