The AI trade is still red-hot — and while the spotlight is on mega caps like Nvidia and Palantir, some of the biggest percentage gainers are coming from the low-priced names.
Check out my complete AI stock watchlist here!
Traders are watching closely for short squeeze potential, sector sympathy, and momentum continuation plays.
Here are three AI penny stocks making noise this month…
3 Artificial Intelligence Penny Stocks to Watch in July 2025
My top 3 AI penny stocks to watch in July are:
| Stock Ticker | Company Name | YTD Performance |
| NASDAQ: IREN | Iris Energy Ltd | + 72.96% |
| NASDAQ: SOUN | SoundHound AI Inc | – 37.20% |
| NASDAQ: APLD | Applied Digital Corp | + 20.22% |
Let’s break down why these tickers are on my radar…
1. Iris Energy Ltd (NASDAQ: IREN) — The Bitcoin-Fueled AI Expansion Play
IREN has emerged as a top small-cap name for traders watching the AI buildout story. The company hit record monthly revenue in June, reaching its 50 EH/s self-mining target, while also expanding its AI cloud division with a major GPU buildout.
Check out all of its moves here!
It’s already running over 2,400 next-gen NVIDIA Blackwell chips, and its infrastructure buildout includes a 1.4GW flagship facility in Sweetwater, Texas.
With high profit margins in both mining and AI, and strong investor support shown by a $550 million convertible note raise, IREN is one of the few AI penny stocks with real capital behind its expansion.
Watch for this name to stay volatile as long as Bitcoin and AI headlines are driving intraday momentum.
2. SoundHound AI Inc (NASDAQ: SOUN) — The Global Voice AI Leader
SOUN is quietly building one of the strongest use-case pipelines in voice AI. Its platform supports over 25 languages and is already live in cars, restaurants, call centers, and smart devices.
Recent partnerships include Tencent, Hyundai, Kia, and multiple Japanese and Latin American firms — signaling a clear push toward global enterprise adoption.
In Q1, it processed over 2 billion AI queries and handled 10 million restaurant interactions across more than 13,000 locations.
With strong momentum across automotive, hospitality, and financial services, SOUN remains a key watch as traders look for real AI deployments — not just hype.
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3. Applied Digital Corp (NASDAQ: APLD) — The CoreWeave Hangover Setup
APLD exploded in June on news of a $7 billion data center lease deal with Nvidia-backed CoreWeave. The stock soared 128%*, briefly becoming one of the most talked-about AI infrastructure plays of the month.
But it came crashing back down after CoreWeave sold its entire stake, sending a bearish signal that reversed much of the rally. Shares dropped 33% into July, and the stock remains under pressure.
This is a classic “boom and bust” setup. It’s risky — but these are the kinds of stocks that can see big bounces on the right PR or sector sympathy.
APLD isn’t a long-term hold, but it’s a technical trade candidate if the tape heats up again.
* Past performance doesn’t indicate future results
Volatility Driving Opportunity in AI Speculation
We’re starting the second half of 2025 with stocks at record highs — but don’t let that lull you into a false sense of security. There’s a wave of potential volatility building just below the surface.
The big story right now? Trade.
Over the July 4 weekend, the Trump administration began sending official tariff letters to more than a dozen countries, with duties as high as 40% scheduled to kick in by August 1. This follows months of back-and-forth “Liberation Day” tariff threats — and now, the clock is ticking again.
Treasury Secretary Scott Bessent said we’ll see several new trade announcements in the next 48 hours. And while some deals are reportedly being struck, many trading partners are scrambling to avoid steep penalties.
What does that mean for traders?
While mega caps like Nvidia and Tesla are selling off on fears of retaliation and supply chain chaos, we’re seeing a classic rotation into small caps — especially AI stocks with momentum, sympathy potential, and low floats.
It’s a risk-filled environment — but one driven by news, which is good for us traders. With the Nasdaq still within shouting distance of its June correction lows, and macro policy changing daily, traders who stay nimble and catalyst-aware have a real shot at catching explosive moves.
Final Thoughts on AI Penny Stocks in July
This list covers three very different setups:
- IREN has two big catalysts — Bitcoin and AI
- SOUN is making moves again!
- APLD hooked up with CoreWeave, but
AI speculation is still alive — especially in the lower-priced names where traders are looking for outsized percentage moves.
Stay focused on news catalysts, volume, and price action. These tickers move fast. Always trade with a plan.
Most of all… if you’re trading AI stocks, trade them with AI!
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