12 Best AI Penny Stocks to Buy According to Hedge Funds

3. 8×8, Inc. (NASDAQ:EGHT)

Number of Hedge Fund Holders: 16

8×8, Inc. (NASDAQ:EGHT) is a provider of cloud-based communication solutions, offering services such as voice, video, chat, and contact center capabilities through its unified platform. Their product suite includes 8×8 Work, a unified communications solution delivering voice services, secure video meetings, and messaging; 8×8 Contact Center, a cloud-based contact center-as-a-service solution; and 8×8 Engage, an AI-powered tool designed to enhance customer engagement. The company also offers a Communications Platform as-a-Service (CPaaS), enabling businesses to integrate communication services directly into their applications. Serving various industries including healthcare, education, manufacturing, retail, financial services, and government, EGHT’s solutions are designed to improve business communications and customer interactions. The California-based company ranked fifth on our recent list of Top 9 Game-Changing Stocks for AI Revolution.

8×8, Inc. (NASDAQ:EGHT) has been on a deliberate transformation journey, with the Fuze acquisition marking a significant milestone three years ago, providing engineering teams and enterprise customers while bolstering cash flow and revenue growth. The company has successfully reduced 35% of its debt since August 2022, enhancing financial flexibility and enabling product development. The company’s service revenue has remained relatively flat to slightly down, but expenses have been reduced significantly, leading to improved profitability and cash flow generation. EGHT differentiates itself by offering UCaaS, CCaaS, and CPaaS solutions natively owned, focusing on small to medium enterprise customers while maintaining the capability to serve any customer size.

8×8, Inc. (NASDAQ:EGHT) has demonstrated growth in specific areas, with new AI products growing 60% year-over-year, albeit from a small base. EGHT has embraced Microsoft Teams as a partner rather than a competitor, resulting in higher attach rates for their contact center solutions in Teams-related deals. Looking forward, management plans to complete Fuze customer migrations by December 31, 2025, which should remove a current revenue headwind by 2026. The company is making strategic investments in go-to-market initiatives and maintaining its multichannel strategy through direct business, agency, and VAR channels. At least 16 hedge funds owned EGHT stock at the end of Q4 2024 and it is therefore one of the best AI penny stocks to buy according to hedge funds.