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 February 2025

My best AI stocks to watch are:

• NASDAQ: HOLO — MicroCloud Hologram Inc — The Hot Sector Bandwagon Jumper With the DeepSeek Press Release
• NASDAQ: SOUN — SoundHound AI Inc — The AI Spiker Doing an Offering in the Fallout of DeepSeek
• NASDAQ: QUBT — Quantum Computing Inc — The Quantum Computing Sector Leader on a Pullback
• NYSE: QBTS — D-Wave Quantum Inc — Another Damn Quantum Computing Penny Stock!
• NASDAQ: RGTI — Rigetti Computing Inc — The Quantum Computing Stock on a Big Bounce
• NASDAQ: NVDA — NVIDIA Corp — The AI Mega-Cap Sector Leader I’m Watching Very Closely
• NASDAQ: APP — Applovin Corp — The AI Mega-Cap Where the Smart Money Is Going
• NASDAQ: PLTR — Palantir Technologies Inc — The DeepSeek Survivor That Wall Street Is Betting Against
• NASDAQ: AAPL — Apple Inc — The Tech Leader That’s Looking Smart for Not Pegging Its Hopes on AI
• NASDAQ: META — Meta Platforms Inc — The Earnings Play That Is Also an AI Play

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 February — rated on chart pattern, price action history, and catalyst — include the following:

Stock Ticker	Company	Performance (YTD)
NASDAQ: HOLO	MicroCloud Hologram Inc	– 72.92%
NASDAQ: SOUN	SoundHound AI Inc	– 24.01%
NASDAQ: QUBT	Quantum Computing Inc	– 48.45%
NYSE: QBTS	D-Wave Quantum Inc	– 39.65%
NASDAQ: RGTI	Rigetti Computing Inc	– 31.03%
NASDAQ: NVDA	NVIDIA Corp	– 14.11%
NASDAQ: APP	Applovin Corp	+ 10.21%
NYSE: PLTR	Palantir Technologies Inc	+ 34.75%
NASDAQ: AAPL	Apple Inc	– 4.74%
NASDAQ: META	Meta Platforms Inc	+ 17.38%

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 Hot Sector Bandwagon Jumper With the DeepSeek Press Release

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

In case you hadn’t heard, on Monday, January 27, DeepSeek replaced ChatGPT as the most downloaded app in the U.S. on the Apple app store.

DeepSeek was founded by Liang Wenfeng in 2023 as an arm of High-Flyer, a hedge fund that focuses on AI.

DeepSeek is essentially China’s latest open source AI. And it’s rivaling top U.S. competitors like ChatGPT.

Another key point to make about DeepSeek: It apparently cost a fraction of the training costs when compared to other AI in the industry. For example, it cost an estimated 10% of Meta’s costs for developing Llamma.

As a direct result, major U.S. tech stocks took a big dive Monday.

Everyone’s wondering if the U.S. AI market is overinflated because China just created an open source AI for cheaper than the top U.S. tech companies — despite the AI sanctions that the U.S. has against China.

And HOLO wasted zero time hopping on this bandwagon.

Why I Like It

At 8 A.M. Eastern on January 27, HOLO announced that it would integrate DeepSeek into its holographic AI applications.

The stock spiked 60% after the news came out.

These sketchy penny stocks know how to play the system … 

We saw stocks like SoundHound AI Inc. (NASDAQ: SOUN) announce news with NVIDIA Corporation (NASDAQ: NVDA) when NVDA was the star of the stock market.

Now, NVDA’s taking a hit because China’s DeepSeek doesn’t need their microchips.

And sketchy stocks reversed the tables to announce a press release that shows their immediate DeepSeek integration.

It’s a sly trick to spike their stock price.

And for traders, it’s a perfect opportunity to profit.

HOLO could rally in February.

Plus, I expect to see more runners with news related to DeepSeek and China’s cheap AI. The whole sector is in the middle of a giant shakeup right now.

2. SoundHound AI Inc (NASDAQ: SOUN) — The AI Spiker Doing an Offering in the Fallout of DeepSeek

My second AI penny stock pick is SoundHound AI Inc (NASDAQ: SOUN).

SOUN was one of the first AI stock spikes when AI burst on the scene in early 2023. 

And all these months later, the stock is still in play.

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

Why I Like It

The price fell from its highs in 2024 at $24.98 per share.

I didn’t want to buy shares at those highs. I was afraid of a pullback like the one we got in January this year.

But now that the price sold off a bit, there’s less risk of a price drop. In fact, the chart already shows one bounce from $12.50 to $17.50 in mid January.

Plus, the company just held an offering … 

Public stock offerings usually tank the share price because it adds supply to the market. That’s a law of supply and demand.

But even after the offering news, SOUN continues to trade above the support from the bounce at $12.50.

It’s possible that we see another rally from this level.

Especially if the company announces a bullish press release.

And if the price falls lower … Notice the support at $10 from March 2024.

3. Quantum Computing Inc (NASDAQ: QUBT) — The Quantum Computing Sector Leader on a Pullback

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

The quantum sector was red hot in November and December of 2024.

And the January selloff on these quantum computing stocks is attributable to Jensen Huang’s comments about the sector on January 8.

The NVDA CEO mentioned that the market is still years away from true quantum computers. And the sector took it as a massive gut punch.

Take a look at the chart below:

Why I Like It

These stocks can still rally from their recent selloff.

The AI sector is volatile enough that anything could happen at this point … 

QUBT already bounced from January 13 to January 16, from $6.41 to $12.70. More than 90%!

And there’s more volatility ahead as the price consolidates above support from both November and December’s price action.

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

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

The quantum sector helped to spike a lot of low-priced stocks.

And they’re all still worth a watch in February of 2025.

Why I Like It

I’m looking for follow-up bounces.

A lot of people don’t understand the true potential of these plays right now … The AI sector is unlike any sector run that we’ve seen before!

It’s most comparable to the dotcom bubble in the late 90s and early 2000s. But there’s so much more money in the market these days.

We’re seeing the same stocks spike over and over again at an insane rate.

Right now it looks like QBTS topped out around $11 … 

But people thought $3 was a solid top in 2023 … And look what happened:

Keep these quantum stocks on your watchlist. Set alerts in StocksToTrade if you need to.

Get ready for a sector rally … 

5. Rigetti Computing Inc (NASDAQ: RGTI) — The Quantum Computing Stock on a Big Bounce

My fifth AI penny stock pick is Rigetti Computing Inc (NASDAQ: RGTI).

This is another quantum stock that plunged in recent weeks.

You know the drill …

Why I Like It

This stock already rallied pretty intensely.

And better yet, it’s holding its gains.

There’s resistance around $20 from early January. And this stock could easily retest those highs.

Take a look at the chart below:

Make sure to identify solid support levels when building positions on these quantum computing stocks.

It doesn’t necessarily matter what the company does. We’re just trading hype in the market.

6. NVIDIA Corp (NASDAQ: NVDA) — The AI Mega-Cap Sector Leader I’m Watching Very Closely

My sixth AI penny stock pick is NVIDIA Corp (NASDAQ: NVDA).

NVDA took a big hit when DeepSeek replaced ChatGPT as the most downloaded app in the Apple app store. It already fell 18% … 

Then the price fell even further after Trump announced tariffs against China, Mexico, and Canada.

Take a look at the chart below:

Why I Like It

I’m watching NVDA to keep an eye on the U.S. AI sector strength.

NVDA is one of the only stocks that’s capable of holding its gains in a market that some speculate is already over-hyped.

Plus, the momentum in the larger market directly affects the lower-priced stock trading in our niche. Keep an eye on NVDA to stay up to date.

And use Iris to build smart swing trade positions on this AI sector leader.

7. Applovin Corp (NASDAQ: APP) — The AI Mega-Cap Where the Smart Money Is Going

My seventh AI penny stock pick is Applovin Corp (NASDAQ: APP).

It’s not all doom and gloom for the U.S. stock market.

There are still stocks pushing higher despite DeepSeek hitting the market … 

Why I Like It

APP gapped higher in November after announcing bullish earnings and revenue. 

And the price quickly rallied toward the highs after a brief drop due to the DeepSeek volatility. 

This stock is a strong runner right now. And it points toward general support from the ‘smart money’ in the market.

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

APP works in the software industry, specifically to connect businesses with customers via mobile applications. And on the company’s homepage, it details the utilization of AI to achieve these business goals:

“AI-powered user targeting delivers the high-quality users you care about and uncovers new, incremental audiences to fuel further growth.”

And it’s quite a rocket in the stock market!

I know the chart might look overextended. That’s a good cautionary thought.

Remember that traders in our community use IRIS to find smart positions on runners that might look overextended.

Keep an eye on this AI runner in February!

8. Palantir Technologies Inc (NASDAQ: PLTR) — The DeepSeek Survivor That Wall Street Is Betting Against

My eighth AI penny stock pick is Palantir Technologies Inc (NASDAQ: 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.

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 February 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. 

We’re even seeing reports from WallStreet that PLTR could drop 40% in 2025 … 

Why I Like It

Nobody cares what Wall Street thinks 😆

In early February, PLTR shot to new all-time highs despite the Chinese AI and despite Trump’s tariffs.

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

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

And our AI does all of the heavy lifting. It sifts through revenue, outstanding debt, future-earnings trajectories, past price action, etc. …

It gives us a customized-trade plan based on our popular patterns.

And 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.

9. Apple Inc (NASDAQ: AAPL) — The Tech Leader That’s Looking Smart for Not Pegging Its Hopes on AI

My ninth AI penny stock pick is Apple Inc (NASDAQ: AAPL).

AAPL is a big name, no doubt, and it’s always on our radar.

But let’s focus on how to trade it, rather than get caught up in the ‘big tech’ story.

Why I Like It

AAPL has strong fundamentals, huge cash reserves, and consistent growth.

Plus, it has a diversified business that doesn’t fully rely on AI prowess. That makes it a smart hedge for anyone who’s worried about U.S. AI supremacy.

When it comes to trading, the key is to treat it like any other stock. We have to focus on price action rather than falling into the long-term loyalty trap.

Yes, investment positions are a healthy part of a balanced portfolio, but on this watchlist we’re interested in calculated trades.

AAPL moves more slowly than a penny stock. That means we’re looking to hold positions longer than usual. Just make sure to keep your stops tight.

This is another great swing-trade opportunity in the AI industry.

With a giant like AAPL, act fast and avoid emotional attachment. Don’t fall into the trap of thinking Apple is always a “safe” stock.

Treat it like any other ticker, trade the spikes, and don’t let the size or story of the company cloud your judgment.

Use AI to find smart swing-trade entries!

10. Meta Platforms Inc (NASDAQ: META) — The Earnings Play That Is Also an AI Play

My tenth AI penny stock pick is Meta Platforms Inc (NASDAQ: META).

On January 29, META announced bullish earnings and revenue that helped to push the share price higher.

But is DeepSeek an issue for this tech giant that’s investing big in AI?

Why I Like It

The META price action is encouraging. Prices reached new all-time highs on January 30.

We have yet to see whether it can compete after China undercut its AI investment costs.

But Mark Zuckerberg is not facing this challenge lying down. He’s reportedly employed several “war rooms” to figure out how China beat the U.S. on AI costs.

The recent earnings announcement is a great sign that the company is healthy and ready to compete. And Zuckerberg’s response to DeepSeek shows just how serious he takes this issue.

Take a look at the chart of META below:

The war of AI innovation is far from over!

Use IRIS to build smart positions on this massive tech giant.

*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.