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 July 2024

My best AI stocks to watch are:

• NASDAQ: BMR — Beamr Imaging Ltd — The Oracle Catalyst AI Penny Stock
• NASDAQ: MLGO — MicroAlgo Inc — The Micro-Consciousness Quantum Research Penny Stock 
• NASDAQ: AMZN — Amazon.com Inc — The Mega-Cap AI Stock at All-Time Highs
• NASDAQ: GOOG — Alphabet Inc — The Tech Giant With an Autonomous Vehicle Subsidiary
• NASDAQ: MSFT — Microsoft Corporation — The AI Mega-Cap Stock That Could See a “Tidal Wave” of Monetization
• NASDAQ: NVDA — NVIDIA Corp — The Post-Split AI Stock Sector Leader 
• NASDAQ: SMCI — Super Micro Computer Inc — The AI Mega-Cap Stock That’s Consolidating
• NASDAQ: APP — Applovin Corp — The IRIS Swing Pick That’s Been Pulling Back
• NASDAQ: CRWD — Crowdstrike Holdings Inc — The IRIS Swing Pick With a Volatile Past Month
• NASDAQ: AXTI — AXT Inc — The Earnings Winner With Good Consolidation

AI was one of the hottest sectors in 2023… 

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 Microsoft Corporation (NASDAQ: MSFT), Super Micro Computer, Inc (NASDAQ: SMCI), and CrowdStrike Holdings, Inc. (NASDAQ: CRWD).

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

Stock Ticker	Company	Performance (YTD)
NASDAQ: BMR	Beamr Imaging Ltd	+ 192.22%
NASDAQ: MLGO	MicroAlgo Inc	+ 96.75%
NASDAQ: AMZN	Amazon.com Inc	+ 29.71%
NASDAQ: GOOG	Alphabet Inc	+ 32.94%
NASDAQ: MSFT	Microsoft Corporation	+ 22.07%
NASDAQ: NVDA	NVIDIA Corp	+ 157.75%
NASDAQ: SMCI	Super Micro Computer Inc	+ 196.36%
NASDAQ: APP	Applovin Corp	+ 115.78%
NASDAQ: CRWD	Crowdstrike Holdings Inc	+ 55.93%
NASDAQ: AXTI	AXT Inc	+ 40.08%

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. Beamr Imaging Ltd (NASDAQ: BMR) — The Oracle Catalyst AI Penny Stock

My first AI penny stock pick is Beamr Imaging Ltd (NASDAQ: BMR).

On February 12, at 7 A.M. Eastern during premarket hours, BMR announced a partnership with NVIDIA Corporation (NASDAQ: NVDA). 

NVDA is arguably the most popular company in the world right now.

The company is STILL surging to new heights as the tech sector scrambles for NVDA microchips.

The massive tech stock is smashing company value records and even pushed past other trillion-dollar tech businesses like Meta Platforms Inc. (NASDAQ: META) and Alphabet Inc. (NASDAQ: GOOG).

It even briefly surpassed Microsoft Corporation (NASDAQ: MSFT) to be the most valuable company listed on the U.S. stock exchange in June.

A hook up with a sector leader like NVDA is HUGE news for a penny stock like BMR.

The share price spiked 1,500%* in less than 24 hours on February 12. Since then, the stock has lost 80% of its value.

But there’s a possible squeeze brewing … 

Why I Like It

Ever since Keith Gill returned to the market in May, short squeeze volatility has been off the charts!

And BMR could be the next victim. Prices spiked a bit on June 12 after the company announced an AI-ready video processing system for customers. I need more volatility, but the catalyst was perfect!

Now, it’s not a 100% guarantee that BMR will push to new highs.

Nothing is guaranteed when it comes to the stock market.

But we know that volatile stocks can follow popular patterns.

We’re not certain BMR will break out … but if it does, there are patterns we can use to trade the price action.

2. MicroAlgo Inc (NASDAQ: MLGO) — The Micro-Consciousness Quantum Research Penny Stock 

My second AI penny stock pick is MicroAlgo Inc (NASDAQ: MLGO).

MLGO is a tech stock that develops software like algorithm optimization for online advertising and the gaming industry. 

Thanks to all of the AI momentum in 2024, MLGO managed a 330%* spike in less than two days during February of this year.

But that pales in comparison to the moves from June …

The price spiked 860%* on June 4 and 560%* between June 24 and 26. Take a look at the chart below. Every candle represents one trading day:

Why I Like It

The most recent spike shows good signs of consolidation.

There’s a fair chance these shares surge higher in July.

Plus, StocksToTrade shows the float is only 1.8 million shares. The low supply of shares (anything below 10 million) helps the price spike higher when demand increases.

There will be more trade opportunities on this stock as a result!

3. Amazon.com Inc. (NASDAQ: AMZN) — The Mega-Cap AI Stock at All-Time Highs

My third AI penny stock pick is Amazon.com Inc. (NASDAQ: AMZN).

Amazon started as an online book company …

Then it exploded as a larger online retailer. Amazon is one of the main businesses that took momentum away from more traditional brick and mortar retailers.

And in recent months it expanded into the AI services sector.

Why I Like It

Amazon offers an AWS AI service that boasts yet another revenue stream for the tech giant.

And the stock just broke to new all-time highs toward the end of June. See the chart below, every candle represents one trading day:

It’s not a 100% guarantee that prices will continue higher this year … 

But nothing’s ever guaranteed in the market. All we can do is follow the hottest trends.

And in 2024, tech and AI are all the rage.

4. Alphabet Inc. (NASDAQ: GOOG) — The Tech Giant With an Autonomous Vehicle Subsidiary

My fourth AI penny stock pick is Alphabet Inc. (NASDAQ: GOOG).

This is another HUGE tech stock that made a comeback in 2024 thanks to the overall AI-market strength.

Alongside AMZN, GOOG made new highs to end June. Take a look at the chart below:

Why I Like It

Believe it or not, certain companies are still moving forward on possible autonomous vehicles.

The advent of AI made the goal much more achievable. And Google’s “Waymo” is one of the biggest AV projects to watch in 2024.

Take a look at the company’s website below:

GOOG is one of the few companies that has the cash, the manpower, the technology, and the wherewithal to meaningfully pursue a marketable AV.

And among its other tech-related products, the Waymo AV could help propel the share price higher this year.

5. Microsoft Corporation (NASDAQ: MSFT) — The AI Mega-Cap Stock That Could See a “Tidal Wave” of Monetization

My fifth AI penny stock pick is Microsoft Corporation (NASDAQ: MSFT).

NVDA briefly passed MSFT in June as the most valuable company on the U.S. stock market.

But it didn’t last long as NVDA dipped promptly after claiming the first-place spot.

Why I Like It

MSFT isn’t going anywhere … 

Even if NVDA claims the most valuable spot again, MSFT will remain right on its heels.

MSFT is in the process of developing its own high-processing microchips in an effort to reduce its reliance on NVDA.

And there are analysts predicting that the AI market surge could last another year or two …

MSFT is already up 20% this year. For a stock with a market cap of $3 trillion, that’s an astounding move! And prices are hovering near all-time highs.

Take a look at the chart in 2024 thus far:

You can use our IRIS swing-trade bot to build smart positions on these big tech runners!

6. NVIDIA Corp (NASDAQ: NVDA) — The Post-Split AI Stock Sector Leader 

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

The 10-for-1 stock split on June 7 opened the door for small-account traders to build positions on 2024’s most legendary stock.

NVDA was previously trading at $1,200 per share. The split brought prices down to $120.

After the split, prices surged to new all-time highs.

But in the last few days we’ve seen NVDA pullback from its meteoric trajectory. Naturally, small-account forums like Reddit’s WallStreetBets are full of NVDA speculation.

• Will it turn into a full-blown free fall?
• Will it rebound to new highs?
• How do I make money on this runner???

Why I Like It

Relax … there’s still time for traders to build a position on this stock. Especially since the recent pull back. Prices are trying to consolidate around the stock-split level from early June.

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

This mega-cap stock spiked 16% in one post-split week before dropping. That’s the kind of volatility that should draw the attention of the entire market.

7. Super Micro Computer Inc (NASDAQ: SMCI) — The AI Mega-Cap Stock That’s Consolidating

My seventh AI penny stock pick is Super Micro Computer Inc (NASDAQ: SMCI).

On March 5 we learned that SMCI would join the S&P 500 this year. That’s BIG news for a mega-cap stock.

Now, we usually trade low-priced stocks. Not stocks like SMCI, where the share price is over $800.

Cheap stocks are attractive because:

• We can load up on shares.
• The low price helps the stock spike higher from a percentage perspective.

Higher priced stocks like SMCI aren’t known to surge like volatile penny stocks. But the AI and tech sectors are so hot in 2024, we’re seeing huge moves from large-cap stocks like SMCI.

In a lot of ways, SMCI acts as a tech sector leader. We can gain insight on lower-priced trade opportunities by watching this big runner.

Why I Like It

Right now I’m watching SMCI because it’s leading the pack.

If SMCI dips, the tech plays in our niche might not spike as high. If SMCI pushes higher, we have to take advantage of that bullish momentum while it lasts.

In 2024, SMCI prices spiked 330%* despite already starting the year above $250 per share. 

Look at the insane move so far this year. And pay attention to the support level at $700.

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

When large-cap stocks like SMCI behave like volatile penny stocks, we can trade them for lower prices using options.

Now, at the mention of “options” a lot of traders shy away.

You’re free to trade volatile low-priced runners. But options setups aren’t as confusing as you might think:

An option is a contract that gives you the right to buy or sell shares of a stock.

Theoretically: If you think SMCI is going to trade higher in the future, you could buy a contract and then sell it after SMCI spikes without actually buying any shares of SMCI.

The value of the contract is what we’re trading, not the actual stock.

Our AI swing-trade bot, IRIS, tracks mid-cap swing trade ideas AS WELL AS options trade ideas. Interested in trading options? Take a look at IRIS’s top picks.

There are so many opportunities to profit in this 2024 market.

Pick a strategy that makes sense to you and hit the ground running!

8. Applovin Corp (NASDAQ: APP) — The IRIS Swing Pick That’s Been Pulling Back

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

We talk a lot about small-cap day trades. But before I learned about the profit opportunities among small-cap spikers, I would swing trade larger stocks.

It’s still a viable strategy. Especially in this insane 2024 market. And thanks to AI, I was able to automate the process.

IRIS scans the market to find stocks that match my swing trading framework.

Now, some of these plays are higher priced … that’s because they’re real companies with real financials and revenue.

Compared to volatile penny stocks, which are usually just crap businesses in disguise.

That’s why we swing trade higher-priced plays and only day trade volatile penny stocks.

A trader’s profit angle in the market depends on what strategy works best for THEM. I included both kinds of plays in this watchlist because there’s SO MUCH opportunity right now.

Why I Like It

APP gapped up on February 15 after its fourth-quarter financial data surpassed expectations. 

The company attributed a fair chunk of its success to a brand new AI advertising engine. Ever since the announcement, prices continued to climb. The entire move already measures 80%.

Prices pulled back a bit in April, but surged to new highs on May 9 after the company’s first quarter ad spending boosted its overall market outlook.

Take a look at the chart below of APP in 2024:

The price is still consolidating after the first quarter announcement on May 9. That gives us a perfect opportunity to find solid support before a surge higher!

The intraday moves for higher-priced stocks aren’t as explosive. That means we don’t have to watch our swing-trade positions as closely.

This is a viable strategy for traders right now. It all depends on what works best for YOU.

APP is one of IRIS’s favorite swing trade setups right now.

>> Click here for the full trade breakdown <<

9. Crowdstrike Holdings Inc (NASDAQ: CRWD) — The IRIS Swing Pick With a Volatile Past Month

My ninth AI penny stock pick is Crowdstrike Holdings Inc (NASDAQ: CRWD).

Surprise surprise, CRWD is another IRIS swing-trade stock.

The chart shows A LOT of volatility in 2024 — especially in June when it surged to new 52-week highs after announcing that CRWD would join the S&P 500.

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

Why I Like It

This is a popular cybersecurity company at the center of the AI industry.

Since the emergence of AI in 2023, there’s a growing risk of cyber attacks from individuals using AI for nefarious purposes.

As a result, cybersecurity companies have to evolve to meet this oncoming risk. And since CRWD is one of the most popular cybersecurity companies in the market, it’s in a perfect position to profit.

And I’m not the only one who’s interested in this price action: IRIS is following the stock closely.

10. AXT Inc (NASDAQ: AXTI) — The Earnings Winner With Good Consolidation

My tenth AI penny stock pick is AXT Inc (NASDAQ: AXTI).

On Thursday, February 22 during the afternoon, AXTI held an earnings call.

This is a direct excerpt from the call:

“Sales grew 10% in the quarter with early signs of recovery in the power market and brand new demand related to artificial intelligence.”

Dr. Morris Young, Chief Executive Officer of AXTI

Shares started to move during after-hours on February 22. It gapped up the next morning and continued in the following days. The spike measured 130%*.

But the stock took a massive dive on April 4 after we learned that the company was under investigation.

Take a look at the 2024 chart below, every candle represents one trading day:

Apparently, AXTI has a subsidiary that does business in China. The company attempted to IPO on Chinese markets but was blocked by the government for legal reasons … possibly relating to falsifying data, tax evasion, unsafe chemical storage, etc. …

Why I Like It

Now, I know what you’re thinking, “Tim, this company could be absolute garbage. China doesn’t even want it.”

Friends, look around. ALL of these penny stock companies are garbage. That’s why they’re penny stocks.

But we can trade the bullish momentum for short-term profits using popular patterns.

AXTI has already shown its history of spiking and volatility. It’s likely we’ll see more volatility in the future.

 

*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.