Artificial Intelligence Penny Stocks

Artificial Intelligence (AI) penny stocks represent a high-risk, high-reward segment of the stock market, where shares trade at relatively low prices — often below $5. These stocks are typically associated with small, yet innovative companies focusing on integrating AI into various products and services. For investors and traders, these stocks offer a speculative opportunity to get in on the ground floor of potential technological breakthroughs. However, due to their volatility and these companies’ early stage, they require rigorous analysis and a keen eye for market trends.

10 Best AI Stocks for January 2025

My best AI stocks to watch are:

• NASDAQ: HOLO — MicroCloud Hologram Inc — The AI Meme Penny Stock Getting Into the Quantum Computing Sector
• NYSE: SES — SES AI Corp — The AI EV Battery Penny Stock
• NASDAQ: WIMI — WiMi Hologram Cloud Inc — The Quantum RAM Penny Stock
• NASDAQ: INTZ — Intrusion Inc — The AI Cybersecurity Stock at 52-Week Highs
• NYSE: PLTR — Palantir Technologies Inc — The AI Grinder That I’m Watching Everyday for Weak Open Red-to-Greens
• NASDAQ: QUBT — Quantum Computing Inc — The New Order News Quantum Computing Penny Stock
• NASDAQ: QMCO — Quantum Corp — The 600% Spiker Quantum Computing Stock
• NYSE: QBTS — D-Wave Quantum Inc — Another Damn Quantum Computing Penny Stock!
• NASDAQ: RCAT — Red Cat Holdings Inc — The Drone Penny Stock With the AI Partnership
• NASDAQ: TSLA — Tesla Inc — The Trump Catalyst and a Major Bull Case

AI was one of the hottest sectors in 2024… 

My students have watched hot runners like AMST, PBTS, POAI and more. More importantly, they’ve managed to stay safe because they remember the rules of trading…

These companies are leveraging AI technology and analytics to drive growth and innovation. But remember, just because a company is in the AI sector doesn’t mean it’s a good investment. Always do your research and make informed trading decisions.

AI penny stocks can be part of a diversified investment portfolio, offering a balance between traditional investments and the cutting-edge technology sector. They benefit from advancements in AI technology, which can lead to significant growth as new applications are discovered and implemented.

Here’s the AI stock cheatsheet:

• What is the most promising AI stock?

A sector leader like NVIDIA Corp (NASDAQ: NVDA) is the best bet for the most promising AI stock. But remember, we’re traders, not investors. So the stocks on this list are ones we’re watching for short-term moves, not predictions of which will lead stock exchanges in 2030.

• What are the top 3 AI stocks to buy now?

My top 3 AI stocks to buy now (as long as their price action is strong) are NVIDIA Corp (NASDAQ: NVDA), Palantir Technologies Inc (NYSE: PLTR), and Applovin Corp (NASDAQ: APP).

• Which company is most advanced in AI?

NVIDIA is the most advanced publicly traded company in AI, that’s why it’s the sector leader. But other leading tech stocks like Apple, Microsoft, Google, and Facebook are all safe bets to pull ahead at some point.

• Which Artificial Intelligence stocks have a “Strong Buy” analyst rating?

Analysts tend to love these tech leaders — NVIDIA, Apple, Microsoft, Google, and Facebook. Most analysts have rated all of these stocks as “strong buys.”

Before you send in your orders, take note: I have NO plans to trade these stocks unless they fit my preferred setups. This is only a watchlist.

The best traders watch more than they trade. That’s what I’m trying to model in this article. Pay attention to the work that goes in, not the picks that come out.

Sign up for my NO-COST weekly watchlist to get my latest picks!

10 AI Stocks to Watch

My top AI stock picks for January — rated on chart pattern, price action history, and catalyst — include the following:

Stock Ticker	Company	Performance (YTD)
NASDAQ: HOLO	MicroCloud Hologram Inc	– 93.03%
NYSE: SES	SES AI Corp	+ 21.39%
NASDAQ: WIMI	WiMi Hologram Cloud Inc	+ 101.07%
NASDAQ: INTZ	Intrusion Inc	– 17.32%
NYSE: PLTR	Palantir Technologies Inc	+ 395.62%
NASDAQ: QUBT	Quantum Computing Inc	+ 1,972.20%
NASDAQ: QMCO	Quantum Corp	+ 707.40%
NYSE: QBTS	D-Wave Quantum Inc	+ 995.24%
NASDAQ: RCAT	Red Cat Holdings Inc	+ 1,355.06%
NASDAQ: TSLA	Tesla Inc	+ 69.99%

You can see how the plan with AI penny stocks is rarely buy-and-hold…

Trading these penny stocks should be approached with a clear strategy and an understanding of the risks involved.

1. MicroCloud Hologram Inc (NASDAQ: HOLO) — The AI Meme Penny Stock Getting Into the Quantum Computing Sector

My first AI penny stock pick is MicroCloud Hologram Inc (NASDAQ: HOLO).

HOLO is a massive former spiker.

In February 2024, it spiked 6,400%*. From less than $2 per share to $98!

On the chart below, every candle represents one trading day:

And in December 2024, the price started to spike again.

Why I Like It

On December 30 during premarket, HOLO announced it developed a semiconductor quantum-qubit technology. Furthering its involvement in the quantum computing sector.

StocksToTrade also shows that the float is only 5.4 million shares.

The low supply of shares (below 10 million) will help the price spike higher when demand increases. It’s a basic law of supply and demand.

Sure enough, the price rocketed 530%* higher. And in early January the price is consolidating sideways. That’s a sign that we could see a follow-up bounce from this stock.

• It’s in the quantum-computing sector.
• It has a low float.
• And the price is consolidating.

It doesn’t get much better than that … 

2. SES AI Corp (NYSE: SES) — The AI EV Battery Penny Stock

My second AI penny stock pick is SES AI Corp (NYSE: SES).

This stock never announced any news to explain the spike … 

And yet, it ran 560%* to end December 2024.

Why I Like It

The stock is in the AI and EV sectors, both of which were hot in 2024 and continue to show us profitable volatility thus far in 2025.

The float is larger than we’d like, StocksToTrade shows that there are 211 million shares.

But the longterm chart shows a multi-year selloff that could point toward a larger upside in the near term.

That means: There are fewer bagholders so the stock has more room to run.

The price is consolidating in early 2025. Watch key areas of support that could offer a point to rally from.

The $2 price level plays a big role on this chart.

3. WiMi Hologram Cloud Inc (NASDAQ: WIMI) — The Quantum RAM Penny Stock

My third AI penny stock pick is WiMi Hologram Cloud Inc (NASDAQ: WIMI).

This company announced on Thursday, December 26, that it developed a random-access memory architecture based on quantum technology.

Quantum stocks are the most recent AI-adjacent spikers that we’ve seen in the market. You’ll notice more quantum stocks on this watchlist … 

Why I Like It

The price spiked 120%* after the quantum-computing announcement.

That might seem like a lot … But there are quantum computing stocks on this watchlist that started trading below $2 and shot 1,800%* higher to trade above $20.

WIMI hasn’t even spiked above $3 yet … 

Judging by the strength in this sector already, we have to stay prepared for any more bullish momentum on WIMI.

4. Intrusion Inc (NASDAQ: INTZ) — The AI Cybersecurity Stock at 52-Week Highs

My fourth AI penny stock pick is Intrusion Inc (NASDAQ: INTZ).

Cyber-security stocks are another AI-adjacent industry that has shown us a lot of bullish momentum in the market.

INTZ is the most recent example … 

Why I Like It

StocksToTrade shows that the float is only 6 million shares. We’re off to a good start!

There wasn’t any specific news to cause the most recent spike … 

But during the 1,800%* run, the “Zack’s Investment Research” team posted that INTZ’s earnings beat the company’s estimate in each of the trailing four quarters. The average earnings surprise was 43%.

Plus, the stock broke past 52-week highs on December 30 … That shows an absence of bagholders.

5. Palantir Technologies Inc (NYSE: PLTR) — The AI Grinder That I’m Watching Everyday for Weak Open Red-to-Greens

My fifth AI penny stock pick is Palantir Technologies Inc (NYSE: PLTR).

PLTR joined the S&P 500 ETF Trust (NYSE: SPY) on September 23.

That’s a big deal … The SPY is composed of 500 publicly-traded companies that lead the market.

Why I Like It

Before the AI boom began, PLTR was trading below $10 per share. And it was significantly beat down due to the overall tech-sector weakness in 2022.

But in January 2025 … this is a sector leader in the software industry and it’s included in one of the market’s most popular indices!

Now … a lot of people get nervous when they see this stock, because they don’t want to buy an overextended runner. The recent pullback was already a little nerveracking … 

Take a look at the chart below, every candle represents one trading day:

We don’t have to expose ourselves to the whims of the market.

The goal is to swing trade this runner using solid points of support and resistance. There’s a science to this!

And the AI does all of the heavy lifting. It sifts through revenue, outstanding debt, future-earnings trajectories, past price action, etc. … And it gives us a customized-trade plan based on our popular patterns.

Our AI tool, IRIS, is obsessed with this stock. PLTR’s been on the IRIS watchlist for months!

Use IRIS to build smart positions on PLTR.

6. Quantum Computing Inc (NASDAQ: QUBT) — The New Order News Quantum Computing Penny Stock

My sixth AI penny stock pick is Quantum Computing Inc (NASDAQ: QUBT).

This stock exploded higher after the company announced, on November 13, that it secured the first order from its TFLN photonic chip foundry.

Since then, the stock spiked higher over multiple days in November. Then, it shot to new highs in December. And in January the price is still up!

The spike measures 1,800%* this far.

Take a look, every candle represents one trading day:

Why I Like It

We’ve already seen a lot of good volatility from this stock. And the price is still up …

There’s no telling where it goes from here.

A 1,800%* spike is pretty substantial, but we’ve also seen stocks spike a lot higher in our niche.

Either way, we can expect more volatility from this stock. And where there’s volatility, there’s an opportunity to profit!

7. Quantum Corp (NASDAQ: QMCO) — The 600% Spiker Quantum Computing Stock

My seventh AI penny stock pick is Quantum Corp (NASDAQ: QMCO).

On November 20 during premarket hours, this company announced their new product: DXi9000 to help protect customers from cyber attacks.

AI is great for a lot of things. But the technology’s strengths also make it attractive for cyber criminals.

As a result, companies like Quantum Corp are tasked with thwarting a new kind of enemy. 

Why I Like It

QMCO’s announcement of its DXi9000 is a perfect example of the company’s recent innovations to meet the new needs of the market.

Between November and December … The stock spiked 2,900%* higher as a direct result of this news.

Take a look at the chart below, every candle represents one trading day:

StocksToTrade shows that the float is still only 4.6 million shares. That’s well below our goal of 10 million shares or fewer.

The price is a little overextended right now … But it’s still trading near the highs. 

We’ll likely continue to see intraday volatility from QMCO even if the price doesn’t push any higher. And we can use popular patterns to trade that volatility.

8. D-Wave Quantum Inc (NYSE: QBTS) — Another Damn Quantum Computing Penny Stock!

My eighth AI penny stock pick is D-Wave Quantum Inc (NYSE: QBTS)

This is another quantum computing stock that’s on a multi-week run.

You could say that the spike started on November 4, 2024 when the company announced that it had regained NYSE compliance … 

Then on November 6, the company announced it completed the calibration of its latest 4,400+ qubit Advantage2 processor.

Prices gapped up that day, and by November 7 the spike was well underway.

Take a look at the chart below. Every candle represents one trading day:

Why I Like It

This sector is CRAZY right now.

I’m watching every volatile AI penny stock because there’s always the chance for follow-up volatility.

We can trade this price action using popular patterns on day two, three, four, etc.

In this case … Day twenty, twenty one, twenty two, twenty three, etc.

9. Red Cat Holdings Inc (NASDAQ: RCAT) — The Drone Penny Stock With the AI Partnership

My ninth AI penny stock pick is Red Cat Holdings Inc (NASDAQ: RCAT).

On November 20, RCAT announced a partnership with Palladyne AI to help bring its Teal Drones to market.

The stock spiked 210%* after the announcement and made new highs in December.

Take a look at the chart below, every candle represents one trading day:

Why I Like It

There are great opportunities to profit from RCAT but we need to approach them correctly … 

It’s showing some hesitation around the recent breakout level.

These stocks can follow predictable patterns, but that includes potential crashes.

Build smart trade positions on this stock. Trade with risk in mind.

10. Tesla Inc (NASDAQ: TSLA) — The Trump Catalyst and a Major Bull Case

My tenth AI penny stock pick is Tesla Inc (NASDAQ: TSLA)

We’ve been watching this stock ever since Trump won the election on the night of November 5.

Musk helped Trump campaign during the final months of the election race. And the spike after November 5 is directly linked to Trump and Musk’s new friendship.

But on January 2, 2025, TSLA announced delivery numbers for 2024. Posting the first annual drop of Tesla deliveries.

The trump-fueled rally on TSLA finally hit real-world resistance. And it was bound to happen  because the trajectory on TSLA was insane for a few weeks … 

Take a look at the recent price action, every candle represents one trading day:

Why I Like It

This is potentially just the beginning of the momentum, now that Musk is newfound friends with President elect Donald Trump.

Musk’s companies are embroiled in a variety of legal cases that stunt growth and operations. With Trump’s presidency, those cases could evaporate.

It’s also worth noting … TSLA is facing significant EV competition from overseas companies like China’s BYD. And going into 2025, TSLA is in a better position under Trump amid the trade war with China and the impending tariffs.

It’s not just TSLA … There are five smaller stocks set to skyrocket alongside the EV giant, thanks in part to Trump’s presidency.

Here’s how I plan to play the volatility!

 

*Past performance does not indicate future results

 

What to Look for in an Artificial Intelligence Penny Stock

Choosing the right AI penny stock involves understanding the following key indicators… Actually, it doesn’t matter if the company behind a penny stock specializes in machine learning or any other hot sector, the advice remains the same! 

1. Focus on stocks that exhibit a tradeable pattern on their stock chart. This shows consistency and predictability, crucial for making informed trading decisions. Stocks with clear patterns often react more reliably to AI market predictions and artificial intelligence analysis. (Steer clear of specific stock market predictions though — any stock market guru that promises high returns for any securities should be avoided!) 
2. A small float is another big item on the checklist. Stocks with a limited number of shares available for trading can be more volatile, which is beneficial for traders looking for high returns. Low-float stocks can move significantly on small volumes, providing opportunities for quick gains.
3. Most importantly, look for unusual trading volumes. Spikes in volume often precede price movements, indicating potential for significant returns. High trading volume can be a signal that something important is happening with the stock, making it a prime candidate for trading.

These are the basic rules I follow to find tradeable setups in AI penny stocks. Let’s go into detail on each step.

Exhibits a Tradeable Pattern on its Stock Chart

A tradeable pattern on a stock chart means that the stock has predictable price movements. This can include consistent upward or downward trends, or even repetitive cycles of highs and lows. These patterns make it easier to anticipate future movements, allowing for strategic trading based on market analysis.

My trading experience has shown that stocks with clear patterns are less risky and more profitable. By focusing on stocks that follow identifiable trends, you can better apply artificial intelligence tools to predict movements. This helps in making informed decisions and achieving better trading outcomes.

Stock advice often emphasizes the importance of patterns. They simplify the trading process and allow you to leverage artificial intelligence and automation for more precise trades. Consistent patterns are a hallmark of stocks with strong potential for high returns.

Is a Low-Float Stock

Low-float stocks are appealing because of their potential for rapid price changes. With fewer shares available, any significant buying or selling can lead to substantial price movements. This volatility is perfect for traders looking to capitalize on quick shifts in stock prices for potentially high returns.

However, low-float stocks come with higher risks. Their price can be easily manipulated, leading to sudden drops. It’s essential to stay informed and use AI applications to track these stocks’ real-time data and make swift trading decisions.

Trading low-float stocks requires a solid understanding of market dynamics. My years of teaching and trading have shown that these stocks can provide excellent opportunities if approached with caution and a well-thought-out strategy. Always be prepared for sudden changes and have a plan in place.

Exhibits an Unusual Trading Volume

Unusual trading volume often signals that a stock is about to make a significant move. This could be due to various factors, including news releases, market speculation, or sudden interest from investors. 

Volume spikes are the biggest indicator of the potential for short-term gains.

Using market data and AI analysis, you can spot these volume changes early. This is good info for your trading plan’s entries and exits! High volume indicates increased interest and liquidity, making it easier to get in and out of positions.

From my experience, stocks with unusual trading volumes offer the best trading opportunities. They can provide the momentum needed for quick profits. Always keep an eye on volume trends and be ready to act when you notice unusual activity.

 

 

Is a Former Runner

A former runner is a stock that has previous spikes in its chart. These stocks have a history of rapid gains, making them attractive for traders looking for quick profits. Past performance does not indicate future results — but it can be an indicator of future potential, especially if the stock has recognizable triggers.

Frequent media attention and market speculation often follow former runners. This can lead to renewed interest and another price surge. Tracking news and market sentiment can help you identify these stocks before they run again.

Former runners can be volatile but profitable. My trading approach is built on creating watchlists like this one around former runners, then entering a trade when a setup I like comes together.

Gets Frequent Media Attention

Media attention can significantly impact a stock’s price. Stocks that frequently appear in news reports or analyst recommendations tend to attract more traders, and artificial intelligence growth has been one of the biggest stories in the market. This increased interest often leads to higher trading volumes and price volatility, creating opportunities for short-term gains.

AI applications can help monitor news and social media for mentions of these stocks, and — more importantly — for the sentiment behind these mentions. This kind of buzz is the second biggest indicator of stock movement.

Trading stocks with regular media attention has been a big part of my trading strategy. Staying updated with the latest news and using AI tools for analysis can give you an edge in the market. Always be ready to act on new information to capitalize on price movements.

Where To Buy AI Penny Stocks

When looking to buy AI penny stocks, consider both major exchanges and over-the-counter (OTC) markets. 

The NYSE and Nasdaq offer more regulated environments, providing a higher degree of security. 

OTC markets are full of moonshot penny stock spikers — but they’re more full of disaster stories. These stocks aren’t bound by the same regulatory requirements, which can lead to the kind of volatility that small-account traders should look for… as long as they know how to protect themselves. 

NYSE/Nasdaq Penny Stocks

Penny stocks listed on the NYSE or Nasdaq are generally considered more reliable. These exchanges have strict listing requirements, ensuring that the companies meet certain standards. Trading on these platforms provides a level of security and compliance not always found in OTC markets.

Stocks on these exchanges often have more reliable AI stock data. This can help you make informed decisions and give you a bit more security.

ETFs that focus on technology and AI sectors can also include penny stocks from these exchanges.

OTC Penny Stocks

OTC penny stocks are riskier but can offer BIG rewards. These low-cost stocks are not subject to the same stringent regulatory requirements as NYSE or Nasdaq stocks. This lack of regulation means higher risk, but also the potential for significant gains.

There are a lot of artificial intelligence opportunities in the market, and some of these can be found in the OTC market. My advice is to be very careful about trading these stocks.

OTC penny stock trading requires a good understanding of stock market potential and artificial intelligence’s speculative nature. Remember that these are not value stocks! But with the right approach and tools, you can find valuable opportunities in this less-regulated space. Always prioritize due diligence and risk management when trading OTC stocks.

AI Stocks Under $5

The allure of hot sector stocks, especially when they’re also penny stocks, is undeniable. These stocks present a unique blend of opportunity and volatility. The AI industry is booming, with advancements and applications spreading across various sectors, from healthcare to finance, making AI stocks a magnet for investors looking for the next big thing. The gains here can be proportionately greater than those from more established stocks, mainly because even minor positive news or advancements can send their prices soaring.

However, it’s crucial to approach these opportunities with a clear strategy and an understanding of the risks involved. The volatility of penny stocks, combined with the speculative nature of AI ventures, means that while the potential for rapid gains is significant, the risk of losses is equally high. Conduct thorough research, looking beyond the hype. And never invest in these stocks — only trade them.

Remember, the key to success in trading AI stocks under $5 is not just about jumping on every opportunity but being selective and strategic. It’s about leveraging the explosive potential of the AI sector while managing risk meticulously. By focusing on companies with the potential to lead in their niche, traders can capitalize on the disproportionate gains that these penny stocks offer, all while keeping their investment strategy tight and cutting losses quickly.

What AI penny stocks do you have on your watchlist? Let me know in the comments!

FAQs

How can AI platforms like ChatGPT contribute to the growth of penny stocks in the AI industry?

AI platforms like ChatGPT and related applications are driving significant innovation in various industries. The growing demand from customers for AI-driven solutions is leading to increased market cap and revenues for companies in the AI space, including those whose shares are classified as penny stocks.

Where can I find the latest news and information about AI penny stocks?

For the latest news and market updates on AI penny stocks, you can explore our markets section. It provides in-depth content, links to reliable sources, and recent results related to AI companies and their stocks.

How can I assess the value of an AI penny stock?

The value of AI penny stocks can be assessed by evaluating several factors. These include demand for AI solutions, people involved in the company, and its market cap. Revenue, earnings, and momentum of the stock in the market are also crucial considerations.

When should I consider selling my AI penny stocks?

Deciding when to sell your AI penny stocks involves evaluating your profit margins and market conditions. It’s generally a good idea to sell if you’ve achieved your desired profit or if there are signs of a downturn in the market. Always consult with a financial advisor to make the most informed decisions.