10 Worst Artificial Intelligence Stocks to Buy Under $10

1) Rekor Systems, Inc. (NASDAQ:REKR)

Number of Hedge Fund Holders: 9

Share Price As On September 19: $1.22

Rekor Systems, Inc. (NASDAQ:REKR) is a technology company, which provides infrastructure solutions for transportation, public safety, and urban mobility markets. Its platform, Rekor One, is an AI-powered roadway intelligence platform.

The bears believe that Rekor Systems, Inc. (NASDAQ:REKR) is expected to face pressures in the near term mainly because of liquidity issues. Rekor Systems, Inc. (NASDAQ:REKR)’s lack of cash generation and depleting cash reserves, despite potential demand from government-funded infrastructure projects, might weigh over its stock price. As a result of liquidity pressure, the company is prompted to mostly rely on external financing from debt and equity issuances. Recently, the company witnessed challenges, which include delays in unit deployment as a result of hurricanes and the complexities of government contracting processes.

On the other hand, Wall Street analysts opine that Rekor Systems, Inc. (NASDAQ:REKR) should be aided by advancements in strategic partnerships and technology deployments. The company expects profitability in 2024 or early 2025, courtesy of large contracts and improved gross margins. The company targets adding 6,000 – 8,000 sites in the Southeast, potentially making $200 million – $300 million in cash flows. Moreover, Rekor Systems, Inc. (NASDAQ:REKR)’s market presence is expected to further improve considering its partnerships with companies such as SoundThinking, AWS, NVIDIA, and MS2.

Rekor Systems, Inc. (NASDAQ:REKR) remains confident in its continued accelerated growth and is focused on establishing its leadership position in the transportation infrastructure industry. Therefore, new technology deployments, along with strategic partnerships throughout multiple states, should contribute to its expansion plans.

By the end of 2Q 2024, 9 hedge funds were optimistic about Rekor Systems, Inc. (NASDAQ:REKR).

While we acknowledge the potential of REKR as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued AI stock that is more promising than the ones mentioned on our list but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’

Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and investors. Please subscribe to our daily free newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.