12 Best AI Penny Stocks to Buy According to Hedge Funds

9. Research Solutions, Inc. (NASDAQ:RSSS)

Number of Hedge Fund Holders: 8

Research Solutions, Inc. (NASDAQ:RSSS) is a provider of cloud-based technologies that streamline the discovery, access, management, and analysis of scientific content. Their platforms, including Article Galaxy and Discover, enable researchers to efficiently access and manage scientific literature, leveraging advanced AI and natural language processing technologies. Serving over 1,300 research organizations globally, including more than 70% of the world’s top pharmaceutical companies and prestigious universities, RSSS’ tools facilitate literature discovery, access, and management, enhancing research productivity and innovation.

Research Solutions, Inc. (NASDAQ:RSSS) delivered strong Q2 2025 results with total revenue increasing 15.5% to $11.9 million, driven by a 47% growth in Platform subscription revenue to $4.6 million. The company achieved record organic net new deployments and strong Annual Recurring Revenue (ARR) growth, ending the quarter with $19.1 million in annual recurring revenue, up 23% YoY. The ARR is composed of $12.7 million B2B ARR and approximately $6.4 million in normalized ARR from Scite’s B2C subscribers. Gross margin improved significantly to 48.9%, a 540-basis-point increase over the prior year, primarily due to the revenue mix shift towards the higher-margin Platforms business.

Research Solutions, Inc. (NASDAQ:RSSS) also demonstrated strong cash generation with $1 million in operating cash flow for the quarter and $5.8 million on a trailing 12-month basis. Notably, Scite, which was acquired in December 2023, experienced over 75% pro forma revenue growth over the prior year quarter, leading to an increase in the projected contingent earnout liability. The company has implemented strategic changes, including splitting the sales team into corporate and academic focused teams, which has resulted in increased deal flow. Looking ahead, management is focusing on improving UX and CX across platforms, continuing AI integration into workflows, and enhancing instrumentation and analytics capabilities. With eight hedge fund holders at the end of Q4 2024, RSSS is one of the best AI penny stocks to invest in according to hedge funds.