TM Editors' note: This article discusses a penny stock and/or microcap. Such stocks are easily manipulated; do your own careful due diligence.

Image Source: Unsplash

Most AI & related (AI&R) stocks trade for hundreds of dollars per share yet there are a number of less expensive micro/small cap AI&R stocks (i.e., stocks with market capitalizations above $50M but less than $2B) flying under the radar that warrant your consideration. As you will see below, 80% of the constituents in our Index trade for under $5/share (officially referred to as "penny" stocks) and, as such, provide wider exposure to the sector with less money invested. The index (see below) has shown considerable weakness since the end of July but remains UP 100.8% YTD.

The munKNEE Micro/Small Cap AI Stocks Index

Our new munKNEE Micro/Small Cap AI Stocks Index consists of 10 micro/small cap AI&R stocks (average market capitalization of $297M) with

• MTD price changes ranked in descending order,
• price changes since they peaked in July,
• YTD price changes (all as of last Friday),
• descriptions of their business, and
• recent news in the media.

1. Rekor Systems (REKR): No Change MTD; UP 8.1% since July; UP 134.2% YTD
   • REKR leverages AI, machine learning, and holistic data to support the intelligent infrastructure for smart mobility.
   • Market Capitalization: $194M
   • Read: Rekor Systems, A Company Bringing AI To A Largely Untapped Market
2. Verses AI (VRSSF): DOWN 8.0% MTD; DOWN 40.8% since July; UP 95.7% YTD
   • VRSSF offers a voice and text-based personal AI assistant designed to learn about its users in order to better organize, manage, and optimize their digital life that operates under a user’s direction and on their behalf, searching, filtering, and summarizing information across multiple data sources.
   • Market Capitalization: $124M
   • Read: The BEST A.I. Penny Stock Is VERSES AI
3. Rigetti Computing (RGTI): DOWN 9.8% MTD; DOWN 45.5% since July; UP 64.4% YTD
   • RGTI has developed the industry’s first multi-chip quantum processor for scalable quantum computing systems and serves global enterprise, government, and research clients through its Rigetti Quantum Cloud Services platform.
   • Market Capitalization: $154M
   • Read: Rigetti Computing Awarded Five-Year Contract with Air Force Research Lab for Quantum Foundry Services
4. BigBear.ai (BBAI): DOWN 13.9% MTD; DOWN 35.3% since July; UP 94.0% YTD
   • BBAI provides AI and machine learning to assist customers in aggregating, interpreting, and synthesizing data to enable real-time decision-making capabilities.
   • Market Capitalization: $206M
   • Read: BigBear.ai Receives 6-Month, $8.5M Extension of Phase 2 of U.S. Army Contract
5. SoundHound AI (SOUN): DOWN 14.9% MTD; DOWN 39.6% since July; UP 72.7% YTD
   • SOUN offers voice AI solutions that let businesses offer conversational experiences to their customer in 25 different languages.
   • Market Capitalization: $395M
   • Read: SoundHound to Deliver Voice AI Experience to New Smart Vehicles
6. Digimarc (DMRC): DOWN 16.4% MTD; DOWN 8.2% since July; UP 102.7% YTD
   • DMRC provides ways to add multi-layered and machine-readable identifiers to customer digital assets including ownership, copyright, authenticity, provenance, and more.
   • Market Capitalization: $537M
   • Read: Digimarc Launches Industry-First Digital Copyright Protection
7. GSI Technology (GSIT): DOWN 16.6% MTD; DOWN 48.5% since July; UP 30.6% YTD
   • GSIT designs, develops, and markets semiconductor memory solutions and has partnered with the United States Air and Space Force to explore high-performance edge processing using its Gemini® APU to unleash the potential of various AI applications, including inference and high-performance computing workloads.
   • Market Capitalization: $65M
   • Read: GSI Technology Receives $1.25M Award From The Space Development Agency 
8. Innodata (INOD): DOWN 19.8% MTD; DOWN 41.7% since July; UP 131.6% YTD
   • INOD provides AI data preparation services as well as AI model deployment and integration services and signed an agreement with its fourth Big Five technology customer in August to support their generative AI development initiatives.
   • Market Capitalization: $191M
   • Read: Innodata Announces Another New Big Five Tech Customer and Reports Second Quarter 2023 Results
9. Evolv Technologies (EVLV): DOWN 21.6% MTD; DOWN 41.4% since July; UP 74.8% YTD
   • EVLV provides AI-based weapons detection for security screening to help make places safer.
   • Market Capitalization: $591M
   • Read: Evolv Technology Releases Newest Enhancement to AI-Based Weapons Detection
10.  Applied Digital Corporation (APLD): DOWN 24.8% MTD; DOWN 50.2% since July; UP 154.9% YTD 
    • APLD launched its AI Cloud services in May, 2023, that will provide high-performance computing power for AI applications; has signed agreements with three (3) major customers in the last 4 months worth $640M including an agreement with Hewlett Packard in July to make its supercomputers accessible through its AI cloud service and achieved “Elite Partner” status in the NVIDIA Partner Network in August.
    • Market Capitalization: $514M
    • Read: Applied Digital Launches Cloud Service to Empower AI Applications

The above 10 stocks have an average market capitalization of $297M, an average share price of $2.84 (when the outlier DMRC [$27.16/share], is excluded) and are DOWN 17.0% MTD, DOWN 27.7% since the end of July and UP 100.8%, on average, YTD.

Conclusion

In deciding which, if any, of the above stocks you should invest in, also ask yourself the following 3 questions:

1. Which companies have the potential of becoming major suppliers to any of the major AI developers?
2. Which companies are developing or already have in place, AI products/applications that have the potential of becoming the next big thing?
3. Which companies have AI technology, or technology in development, that makes them prime acquisition targets for one of the major AI tech companies?

...and if you find the right answers you could be well-positioned to generate outstanding returns going forward.

More By This Author:

All About Our 14 Quantum Computing Hardware Developers: Their Progress And News
Israeli-Hamas War: U.S. Exchange-Listed Israeli Stocks Continue To Decline
Largest Cannabis Stocks Continue To Decline This Week