10 Best Small Cap AI Stocks to Buy According to Short Sellers

1. Matterport, Inc. (NASDAQ:MTTR)

Market Cap as of August 26: $1.39 billion

Number of Hedge Fund Holders: 25

Short % of Shares Outstanding as of July 31: 1.71%

Matterport, Inc. (NASDAQ:MTTR) is a 3D spatial mapping company that leverages AI to capture, analyze, and share 3D digital twins of real-world spaces. The company’s platform, integrated with AR, enables users to create immersive virtual experiences, streamline workflows, and gain valuable insights from spatial data.

In Q2 2024, the company generated $42.22 million in revenue, which was lower than Street estimates by $2.27 million. It represented a 6.69% year-over-year growth. The loss per share was $0.02, in-line with Street expectations.

Subscription revenue was responsible for 57% of the total revenue. It increased by 16% year-over-year, reaching a record $24.2 million. Total subscribers grew 28% year-over-year, to 1.06 million. The company expanded its area of operations by 33% from the previous year, reaching a total of 44.0 billion square feet.

In Q2, the company acquired CoStar in a cash and stock transaction valued at approximately $2.1 billion. It also partnered with Crunch Fitness and BMO to provide digital twin solutions for marketing and operational needs. The company integrated with FBS’s Flexmls platform, enabling seamless upload of digital twins and data. Additionally, it achieved AWS IoT Competency status, demonstrating its expertise in IoT technology and cloud transformation.

Matterport, Inc. (NASDAQ:MTTR) is looking to capitalize on the Japanese market. Miho Technos Co., Ltd., a leading Japanese general contractor, adopted the company’s solutions for various construction projects. As we continue seeing examples of expansion efforts by Matterport, Inc. (NASDAQ:MTTR), the company is expected to grow substantially and is therefore one of the best small-cap AI stock to buy now.

The company has 25 hedge fund holders, as of Q2 2024, and the most prominent one is Magnetar Capital with a stake of $27,597,632.

As we acknowledge the growth potential of Matterport, Inc. (NASDAQ:MTTR), our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than MTTR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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