10 Most Popular AI Penny Stocks to Buy Under $5

2. Lantronix Inc. (NASDAQ:LTRX)

Share Price as of March 24: $2.71

Number of Hedge Fund Holders: 17

Lantronix Inc. (NASDAQ:LTRX) develops and markets industrial and enterprise IoT products and services globally. It specializes in embedded IoT solutions that use AI and ML for data analysis and processing. It provides IoT compute products, wired and wireless connectivity solutions, and a SaaS platform for deploying and managing IoT devices.

The company is focusing on the growing Edge AI market by integrating AI into its hardware and software solutions. It’s working closely with Qualcomm to incorporate its AI framework into Lantronix Inc.’s (NASDAQ:LTRX) Edge AI systems to enhance real-time analytics. The company is developing solutions for various industries, which include banking, electronics manufacturing, and agriculture. The acquisition of NetComm for $6.5 million further expands the company’s connectivity capabilities, which is crucial for Edge AI deployments.

The Edge AI market is projected to reach $76 billion by 2031. Lantronix Inc. (NASDAQ:LTRX) is positioning itself to capitalize on this market. In FQ2 2025, the company reported a revenue of $31.2 million. The NetComm acquisition is expected to add $300,000 to $400,000 in quarterly operating expenses. For FQ3, revenue is projected between $27 and $31 million.

180 Degree Capital Corp is optimistic about the company’s future and stated the following regarding Lantronix Inc. (NASDAQ:LTRX) in its Q2 2024 investor letter:

“More recently, we have been working behind the scenes with the management and board of Lantronix, Inc. (NASDAQ:LTRX) on ways to solidify the strong foundation of the company and set it up for success and significant value creation for stockholders in the future. We believe LTRX’s new CEO, Saleel Awsare brings an interesting and successful background to LTRX. What we believe he needed to be in the best position for success were board members who have experience navigating the challenges unique to microcapitalization companies. Following multiple discussions, we introduced Saleel and his board to Narbeh Derhacobian, the former Chief Executive Officer and founder of our former portfolio company, Adesto Technologies, Inc., and one of Adesto’s board members, Kevin Palatnik, who has significant experience as a CFO at multiple related businesses. We were pleased to see that LTRX’s board saw the same value that we do in these individuals, in terms of helping Saleel and his team to have the best opportunities to achieve multiple catalysts that could lead to material increases in value for LTRX and its stockholders.”