The AI sector is still buzzing after DeepSeek AI sent shockwaves through the market. As China’s most advanced open-source AI model gains traction, it’s creating volatility across AI-related penny stocks.
Traders who know how to navigate these momentum waves could find serious opportunities. The AI boom of 2025 is still unfolding—are you ready to take advantage?
In this post, we’re breaking down three AI penny stocks to watch as the DeepSeek hype continues to play out.
Top AI Penny Stock Picks for February 2025
My top AI penny stock picks for February 2025 are:
- NASDAQ: HOLO — MicroCloud Hologram Inc — Short Squeeze Potential?
- NASDAQ: JG — Aurora Mobile Ltd — The Chinese DeepSeek Play
- NASDAQ: SOUN — SoundHound AI Inc — The AI Spiker Doing an Offering in the Fallout of DeepSeek
Check out my main AI and quantum computing watchlist here for my entire February watchlist!
| Stock Ticker | Company | 2024 Performance |
| NASDAQ: HOLO | MicroCloud Hologram Inc | – 74.66% |
| NASDAQ: JG | Aurora Mobile Ltd | + |
| NASDAQ: SOUN | SoundHound AI Inc | – 28.07% |
When a major AI announcement hits the market, small-cap stocks tied to the sector often react first. That’s exactly what happened after DeepSeek AI emerged as China’s most powerful large language model.
Here’s why traders are paying attention:
- DeepSeek-V3’s rapid adoption: The model quickly became the most-downloaded free app on the Apple App Store, sparking speculation about its ability to rival U.S. AI leaders like OpenAI and Google.
- Chinese AI stocks are seeing renewed interest: Several companies have announced DeepSeek-related projects, fueling massive trading volume.
- Big Tech is watching: Major names like NVIDIA (NASDAQ: NVDA) and Palantir Technologies (NASDAQ: PLTR) saw initial sell-offs as traders reassessed AI’s competitive landscape.
Let’s get to the picks…
MicroCloud Hologram Inc. (NASDAQ: HOLO) — Short Squeeze Potential?
HOLO has trended down steadily from its DeepSeek-fueled pump, but a short squeeze could be on the horizon. This stock is no stranger to massive squeezes—it ran more than 4,000%* in February 2024.
Short interest in HOLO has surged by 104.3% in January. As of January 15, 27.6% of the company’s shares were sold short, totaling 5.64 million shares—up from 2.76 million at the end of December.
HOLO has steadily trailed off of its DeepSeek pump highs. If buying pressure increases, short sellers may be forced to cover, potentially triggering another spike.
Aurora Mobile Ltd. (NASDAQ: JG) — The Chinese DeepSeek Play
JG initially spiked on the DeepSeek news but has managed to hold onto some of its gains. Unlike many other AI penny stocks that faded, JG is once again trending up, making it one of the more believable DeepSeek-related plays.
Aurora Mobile’s integration of DeepSeek AI into its GBTBots.ai platform seems more believable because both companies are Chinese … And unlike HOLO, Aurora Mobile’s entire business model doesn’t seem to consist solely of putting out hot-sector press releases.
Do a little digging and you’ll find other differences. JG has seen a 64% profit increase year-over-year—HOLO is down more than 1,300%!
While it’s still a sketchy penny stock, JG’s ability to hold key price levels and regain upward momentum makes it worth watching. If AI stocks stay in focus and JG continues its uptrend, another breakout could be in play.
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SoundHound AI Inc. (NASDAQ: SOUN) — The AI Spiker Doing an Offering in the Fallout of DeepSeek
SOUN remains one of the most actively traded AI stocks, thanks to its strong sector positioning and history of large price moves. The stock pulled back after a recent public offering, which usually weighs on a stock’s price, but it has since stabilized.
SOUN ran to $25 in 2024 before selling off and is now holding support around $14. Despite the dilution from its offering, demand remains strong.
With AI stocks still in focus, SOUN could remain a key momentum stock. If the company announces more AI-related developments, it could spark another move higher.
* Past performance does not indicate future results
Can You Buy DeepSeek Stock?
Right now, DeepSeek AI is not publicly traded. The company is owned by Chinese hedge fund High-Flyer, and there’s no stock ticker symbol available on any exchange.
DeepSeek’s rise has increased market interest in AI stocks, but traders looking for exposure will have to focus on secondary plays like those on this watchlist.
When Will DeepSeek Go Public?
There is no official IPO timeline for DeepSeek AI. As a Chinese AI startup, the company could face regulatory challenges if it tries to list in the U.S. on the Nasdaq or NYSE.
With U.S.-China tensions over AI and tech, any potential IPO would be under close scrutiny. If DeepSeek does go public, it might follow a path similar to Alibaba Group (NYSE: BABA), which debuted in the U.S. before later listing in China.
Until then, investors should be cautious about speculation surrounding a DeepSeek IPO.
How Can You Invest in DeepSeek?
Because DeepSeek AI stock isn’t available yet, traders looking for AI exposure should focus on companies building AI infrastructure, such as:
- NVIDIA (NASDAQ: NVDA) – Leading supplier of AI chips.
- Meta Platforms (NASDAQ: META) – Investing billions in AI research.
- Palantir Technologies (NASDAQ: PLTR) – Specializes in AI-driven data analytics.
While these aren’t penny stocks, they’ve all had tremendous returns in the past few years. If you’re looking to invest in stocks with a solid track record and a big growth potential, these sector leaders should be at the top of your watchlist!
Final Thoughts
The AI sector remains one of the most volatile and exciting areas of the market, with DeepSeek continuing to act as a major catalyst. Stocks like HOLO, JG, and SOUN all have different setups—HOLO has short squeeze potential, JG has one of the strongest connections to DeepSeek, and SOUN remains a key AI momentum stock.
This market isn’t for the reckless—it’s for traders who come prepared. AI penny stocks can move fast, but if you’re just chasing hype without a plan, you’re gambling, not trading.
There’s an old saying in the market: Bulls make money, bears make money, but pigs get slaughtered. Trying to strike it rich on a single trade? That’s how traders blow up their accounts. The real winners stick to a strategy, manage their risk, and know when to take profits.