Bubble In AI "Penny" Stocks Pricked In August

If you are looking to invest in lesser-value artificial intelligence and related (AI&R) stocks, albeit very volatile, consider one or more of the 10 highlighted in this article.

Once upon a time a penny stock referred to a stock trading for less than $1/share but, these days, it refers to the stock of a company that trades for less than $5 per share. Penny stocks are usually considered high-risk investments due to their low price, lack of liquidity, small market capitalization, and wide bid-ask spread. Most penny stocks trade via over-the-counter transactions, hence a cautionary note from TalkMarkets that "penny and/or micro-cap stocks...are easily manipulated; do your own careful due diligence". Access the stock symbols provided to do your own research.

The list below is of 10 "penny" stocks that are trading for less than $5.00/share and also have market capitalizations of more than $100M along with their short interest percentage, and their stock returns in July, in August, in descending order, and YTD.  None are being recommended, per se, but rather, are highlighted as possible opportunities to profit from the speculative frenzy in AI&R stocks.

  1. Rekor Systems (REKR): UP 21.7% in August; UP 70.8% in July; UP 217.5% YTD 
  2. SoundHound AI (SOUN): UP 8.2% in August; DOWN 48.8% in July; UP 42.4% YTD
  3. Presto Automation (PRST): DOWN 16.3% in August; DOWN 23.8% in July; UP 39.3% YTD
  4. BigBear.ai (BBAI): DOWN 18.4% in August; DOWN 14.5% in July; UP 156.7% YTD
  5. Rigetti Computing (RGTI): DOWN 27.7% in August; UP 111.0% in July; UP 152.1% YTD
  6. Butterfly Networks (BFLY): DOWN 31.1% in August; UP 11.7% in July; DOWN 24.4% YTD
  7. Veritone (VERI): DOWN 33.5% in August; UP 17.9% in July; DOWN 40.0% YTD
  8. Verses AI (VRSSF): DOWN 38.8% in August; DOWN 8.4% in July; UP 97.8% YTD
    • Short Interest: NA
  9. Innoviz Technologies (INVZ): DOWN 44.1% in August; UP 44.4% in July; DOWN 39.9% YTD
  10. D-Wave Quantum (QBTS): DOWN 44.8% in August; UP 0.5% in July; DOWN 22.2% YTD

The average market capitalization of the above 10 stocks is $274M with an average stock price of $2.25. Only 2 stocks were up in August compared to 6 in July. In total,

  • the above portfolio was UP 24.6% in July but was DOWN 36.1% in August and is now only UP 10.9% YTD indicating that the bubble in AI "penny" stocks has been pricked. 

In comparison, rather than choosing a specific stock, investors might want to consider buying 

  • the:Global X Artificial Intelligence and Technology ETF (AIQ) which has 93 constituents of various market capitalizations and $0.68 in expenses which was UP 5.5% in July, DOWN 3.2% in August and UP 43.4% YTD or
  • the Robo Global Artificial Intelligence ETF (THNQ) of 72 constituents of various market capitalizations and $0.68 in expenses which was UP 5.4% in July, DOWN 4.9% in August and UP 42.6% YTD.

Naturally, it is imperative that you do your own due diligence before making a decision to do so as my comments are not recommendations, per se. I hope this article has made you aware of the opportunities.

More By This Author:

AI: Bubble In Quantum Computing Stocks Stayed Inflated In August, Barely
AI August Wrap: Bubble Remains Intact, Barely
August Recap: Largest Psychedelic Compound-Based R & D Stocks Down 15%

Disclosure: None  

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