The artificial intelligence (AI) boom is powering some of the market’s fastest moves in 2025, with both large-cap and penny stocks seeing outsized gains. As Q2 earnings season ramps up and demand for AI infrastructure reaches record levels, active investors are hunting for the next breakout AI stocks with strong news catalysts, technical momentum, and sector exposure.
If you want to know what I’m looking for — check out my free webinar here!
Here are three AI penny stocks to watch this August!
3 AI Penny Stocks to Watch in August 2025
| Stock Ticker | Company | Performance (YTD) |
| NASDAQ: APLD | Applied Digital Corporation | |
| NYSE: BBAI | BigBear.ai Holdings | |
| NYSE: HPE | Hewlett Packard Enterprise |
These aren’t stocks that I’m necessarily buying…
These are stocks that I’m watching.
Want the whole list of AI penny stocks?
10 Top AI and Quantum Computing Penny Stocks for August 2025
I’m watching the following three picks extra closely…
Applied Digital Corporation (NASDAQ: APLD) — Multi-Billion Dollar AI Infrastructure Winner
Applied Digital (APLD) has emerged as one of the most dynamic AI data center stocks in 2025. The company’s shares spiked 16% last week after it expanded its collaboration with CoreWeave, raising their total contract value to a staggering $11 billion. This expansion increases CoreWeave’s critical IT load capacity with APLD to 400 megawatts—one of the largest in the sector.
- Major Contract Momentum: New capacity is scheduled to come online as early as Q4 2025, followed by additional phases into 2027.
- Financial Growth: APLD recently reported a 41% year-over-year revenue increase and a narrower net loss, signaling improving fundamentals amid rapid growth.
- AI Data Center Demand: As AI workloads surge, institutional investors and tech clients are seeking large-scale, liquid-cooled infrastructure—a niche APLD is filling.
Stock Outlook:
With shares trending higher and staying in a clear uptrend, APLD is positioned for potential further upside if demand for AI hosting remains robust and new contracts continue. Any new breakout could trigger another wave of buying in this name.
BigBear.ai Holdings (NYSE: BBAI) — Defense AI Play With Key Catalysts in August
BigBear.ai (BBAI) is gaining momentum as a defense-focused AI company often compared to a “low-priced Palantir.” The company provides mission-critical AI analytics, machine learning, and decision intelligence tools to U.S. defense, homeland security, travel, and supply chain customers.
- Government AI Growth: Recent contracts in biometric security and global partnerships have fueled a 60% rally in 2025.
- Analyst Bullishness: H.C. Wainwright raised its price target to $9 in July and forecasts double-digit revenue growth into 2026, supported by a contract backlog of nearly $385 million.
- Earnings Watch: BBAI will report Q2 2025 earnings after the bell on August 11. Wall Street expects a loss of $0.06 per share on revenues of $40.6 million.
Stock Outlook:
Technical analysis remains bullish, with BBAI consolidating gains after its recent run. A positive earnings surprise or further contract wins could push the stock higher, while any pullback may see dip-buyers step in.
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Hewlett Packard Enterprise (NYSE: HPE) — AI-Native Networking With Legal Overhang
Hewlett Packard Enterprise (HPE) is not a typical penny stock by market cap, but its share price puts it on the radar for AI-focused traders seeking both volatility and blue-chip credibility. HPE’s acquisition of Juniper Networks this year bolsters its position in AI-native networking and high-performance computing—a sweet spot as enterprise demand for AI explodes.
- AI & Data Center Leadership: HPE delivers AI-powered networking, liquid-cooled servers, and storage for demanding enterprise workloads.
- Strong Revenue Base: Annual revenues are north of $30 billion, but recent quarters show margin pressure and a rare net loss due to impairment charges.
- Legal Risks: Ongoing antitrust investigations and litigation related to acquisitions have weighed on sentiment, contributing to recent stock weakness.
- AI Sector Tailwind: HPE’s expertise in direct liquid cooling for AI servers and integration with Juniper may help it capture more AI infrastructure spending.
Stock Outlook:
HPE has faced pressure recently but remains in play for traders watching for any legal resolution or renewed institutional buying tied to AI sector momentum.
Key Takeaways for August 2025
Artificial intelligence remains one of the market’s most powerful themes, driving high volatility—and opportunity—for penny stocks and large caps alike. As the sector rotates on earnings, contract news, and technology headlines, APLD, BBAI, and HPE all stand out as actionable names for traders and investors focused on AI infrastructure, government AI, and next-gen networking.
Keep these AI penny stocks on your watchlist for August, and watch for further catalysts as the sector evolves.
This is stock news, not investment advice. StocksToTrade News delivers real-time stock market updates tailored to highlight the key catalysts driving short-term price movements. Our coverage is designed for active traders and investors who thrive in fast-moving markets, with a focus on volatile sectors like penny stocks, AI stocks, Robinhood stocks and other momentum plays. From earnings reports and FDA approvals to mergers, new contracts, and unusual trading volume, we break down the events that can spark significant price action.
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