AI trading got off to a strong start in 2026 off Trump pro-AI executive orders, and there was real momentum behind defense AI, optical infrastructure, and quantum computing names. Then the market pulled back when tariffs and the conflict in the Middle East created uncertainty. Here is the thing: it did not pull back that much. For a sector everyone was calling overextended and a bubble, that kind of resilience told you something real was underneath it.
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Now the backdrop is improving. The ceasefire is holding. Last month the Trump administration committed two billion dollars in grants to nine quantum computing companies — IBM, D-Wave, Rigetti, and others — and took equity stakes in return. That is the federal government signaling this sector is not going anywhere. For traders watching AI-adjacent names, June is shaping up as an interesting time to have a watchlist ready.
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Here are three names I am watching right now.
3 AI Penny Stocks to Watch in June
|
Stock Ticker |
Company |
Performance (YTD) |
|---|---|---|
| NASDAQ: FFAI |
Faraday Future Intelligent Electric Inc. |
|
| NASDAQ: AAOI |
Applied Optoelectronics Inc. |
|
| NASDAQ: CBRS |
Cerebras Systems Inc. |
These three made the list for different reasons, but they share one thing: something is happening with each of them right now that makes them worth watching closely.
- FFAI — fresh momentum off the lows, a business pivot gaining traction, and our screening tool flagged it this morning
- AAOI — the biggest AI optical infrastructure story of 2026, up nearly 19% today after pulling back from its highs
- CBRS — the most significant AI chip IPO in years, three weeks old and finding a floor
These are not stocks I am necessarily buying. These are stocks I am watching.
Want the full AI watchlist? See my 10 Top AI Penny Stocks for June 2026 here.
I am watching the following three picks extra closely.
Faraday Future Intelligent Electric Inc. (NASDAQ: FFAI) — The Former Runner Showing Signs of Life Again
My first pick is Faraday Future Intelligent Electric Inc. (NASDAQ: FFAI).
Most people know FFAI as the electric vehicle company that never quite got off the ground. The story has changed. The company has been pivoting toward AI-powered service robots — and last quarter their revenue beat estimates by a wide margin and losses came in smaller than analysts were expecting. They also closed twenty-five million dollars in new financing in May and won shareholder backing for governance changes that give management more operational flexibility. Read more on what has been moving FFAI.
The reason it is on my screen today: at StocksToTrade we use a proprietary screening system called Oracle that flags stocks hitting technical entry criteria based on price action and volume — the kind of setups that historically precede moves. Oracle flagged FFAI this morning with support in the high thirty-cent range. If you want to understand how we use it, that is exactly what I cover in the free webinar.
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The stock hit its lowest point in April and has been recovering since. A former runner with fresh news, improved numbers, and a new business direction getting traction is one of the more interesting setups in the sub-dollar space right now. Keep size small — this is a volatile name and the risk is real. I watch that high thirty-cent support zone carefully. If it breaks on volume, I step aside.
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Applied Optoelectronics Inc. (NASDAQ: AAOI) — The AI Optical Infrastructure Play Running Again Today
My second pick is Applied Optoelectronics Inc. (NASDAQ: AAOI).
AAOI is up nearly 19% today — which sounds like chasing, but the context matters. This stock ran from the mid-teens earlier this year to a high above two hundred thirty dollars in mid-May, then pulled back hard when the optical sector took a breather. Today it is bouncing. The fundamental story has not changed: the company makes the transceivers and lasers that connect AI data centers at high speed, demand for those products is outpacing supply, and analysts keep raising their targets. Rosenblatt has a Buy rating and a two-hundred-twenty dollar target. Read today AAOI story on StocksToTrade.
Think of AAOI as picks-and-shovels for the AI data center buildout. Amazon, Microsoft, and Google are spending hundreds of billions building AI infrastructure, and the optical hardware connecting it all has to come from somewhere. The company has over three hundred twenty-four million dollars in high-speed transceiver orders locked in and is expanding manufacturing in Texas to meet demand it says will outpace supply through next year.
Is today the start of a sustained recovery or a short-term bounce? The one-hundred-fifty dollar area is the support I watch. If the stock holds and keeps building there, the one-seventy to one-eighty area is the next target zone. Below one-fifty on volume and I want to see the selling exhaust before re-engaging.
Cerebras Systems Inc. (NASDAQ: CBRS) — The Biggest AI Chip IPO in Years Finding Its Floor
My third pick is Cerebras Systems Inc. (NASDAQ: CBRS).
Cerebras went public on May 14 and it was the largest US tech IPO since Uber in 2019. Priced at one hundred eighty-five dollars, it opened above three hundred, hit nearly three-ninety at the intraday high on day one, then came back down and has been consolidating in the low-to-mid two-thirties. That is the classic post-IPO pattern: euphoria, reset, base. Read the CBRS story on StocksToTrade.
The technology is worth understanding. Cerebras builds AI chips on a single silicon wafer — instead of connecting multiple smaller chips together the way most companies do. That design gives it speed and memory bandwidth that is hard to match for training large AI models. Its customers are in enterprise and government where that raw performance is the priority. It is not competing with NVIDIA in the same space — it has found a niche where its architecture wins.
For traders the setup is simple: the all-time low set in late May in the low two-thirties is the support level. Post-IPO stocks that hold above their first significant low tend to have more room to work. A hold above that level and a push back toward two-seventy is the near-term setup. Below the lows on heavy volume and I wait for the next base to form.
*Past performance doesn’t predict future results.
Bottom Line
Three very different stories — a micro-cap former runner flagged by our screening system, a proven AI infrastructure name bouncing off a post-high pullback, and a blockbuster IPO finding its floor. All three have something happening right now that makes them worth watching.
- FFAI — Oracle flagged it this morning. Former runners with fresh news flow and support levels can move fast. Keep size small and respect the stop.
- AAOI — up nearly 19% today, demand outpacing supply through next year, Rosenblatt target in the two-twenties. Watch one-fifty as the key support if you are looking for a re-entry.
- CBRS — post-IPO base building in the low two-thirties. The largest US tech IPO since Uber does not find a permanent floor overnight, but dip buyers have been active. Watch the lows.
I let price confirm before I commit. That is the discipline that keeps you in the game.
I designed our IRIS AI trading tool specifically for active traders — it generates screeners, trading plans, and setups the way I personally approach a stock. Subscribers get weekly analyst reports and live training sessions on top of that.
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