The tech market is poised for an explosive growth phase as the AI revolution accelerates. Dan Ives, Global Head of Technology Research at Wedbush Securities, recently appeared on CNBC on November 25 to discuss the current state of the tech market, predicting that it will be “on fire” as the AI revolution enters its next phase, marking the beginning of what he considers a fourth industrial revolution. Ives emphasized that the software segment of AI is now critical, with expectations that AI software companies will lead this growth. Ives believes that the consumption model in enterprise AI, driven by advancements from major chipmakers, will lead to underestimated growth rates of 15% to 20% for these software companies.
Ives also addressed the impact of bond yields and currency strength on the tech trade, noting that while these factors could present headwinds, they are already factored into market guidance. He expressed confidence in a strong demand perspective that could propel the NASDAQ to 20,000 in the next two years, with aspirations for it to reach 25,000 thereafter. Furthermore, he sees potential benefits from deregulation in the tech industry, suggesting that it could facilitate significant M&A activity. Ives remains bullish on the tech sector as it adapts to evolving market conditions driven by AI advancements.
Earlier, on November 22, Jeff Richards, Notable Capital managing partner, joined CNBC’s ‘Closing Bell’ to discuss the tech trade and the tailwinds for the software sector as well. He noted that while growth rates for software companies have decelerated compared to 2 or 3 years ago when many public companies were growing over 50%, growth is resurgent now. Richards pointed out that the peak multiples for software stocks were significantly higher in late 2021, but current valuations are more attractive, especially as AI begins to play a critical role in driving growth.
Richards emphasized that AI is not just a future prospect but is actively influencing the market now, with private companies reporting that 60% to 70% of their recent bookings are AI or AI-related. He mentioned that the infrastructure build-out for AI is comparable to historical investments in physical infrastructure, with major tech companies collectively spending around $300 billion annually. This investment is expected to lead to significant advancements in both the enterprise and consumer software sectors.
He also highlighted the global nature of this evolution, noting that major tech players from MAG7 are not only serving US customers but are also expanding their reach into international markets. This global perspective is crucial as these companies leverage their cash flow to invest in AI infrastructure, which Richards believes will shape the future of technology.
Richards remains optimistic about the technology sector’s trajectory, as does Ives, particularly as it adapts to the growing influence of AI and its applications across various industries. With that context, we’re here with a list of the 12 best artificial intelligence stocks to invest in under $10.
Methodology
We sifted through Finviz and internet lists to compile a list of top AI stocks trading below $10. We then selected the 12 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q3 2024. The hedge fund data was sourced from Insider Monkey’s database which tracks the moves of over 900 elite money managers.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
12 Best Artificial Intelligence Stocks To Invest In Under $10
12. Airgain Inc. (NASDAQ:AIRG)
Share Price as of November 27: $8.99
Number of Hedge Fund Holders: 3
Airgain Inc. (NASDAQ:AIRG) specializes in wireless connectivity solutions. It provides a range of products, including embedded antennas, modems, and IoT solutions for industries like automotive, industrial, and consumer electronics. It launched the AT-Flight asset tracker in November, featuring AI which automatically detects flight events and activates airplane mode to comply with FAA regulations.
This asset tracker has been specifically designed for the healthcare and life sciences IoT markets, with a wide operating temperature range, making it ideal for transporting temperature-sensitive medical goods. It’s engineered to track high-value, temperature-sensitive assets in real-time, both on the ground and in the air. It boasts an impressive battery life, exceeding industry standards.
Airgain Inc.’s (NASDAQ:AIRG) family of asset trackers has been a growth driver for the company. However, in the third quarter of 2024, enterprise sales for the asset tracker portfolio dropped from $8.6 million in Q2 to $6.7 million. This decrease was primarily due to a $1.9 million drop in embedded modem and custom product sales. The company was still able to improve overall sales by 17.56%.
The AT-Flight has already garnered significant industry attention, with initial purchase orders from leading healthcare solution providers, suggesting recovery for the asset tracker portfolio. This product launch aligns with its broader strategy to expand its presence in high-value IoT sectors by offering a range of innovative tracking solutions.
11. POET Technologies Inc. (NASDAQ:POET)
Share Price as of November 27: $5.06
Number of Hedge Fund Holders: 5
POET Technologies Inc. (NASDAQ:POET) is at the forefront of advanced optical technology for AI applications. Its specialty is the POET Optical Interposer, a platform enabling the seamless integration of electronic and photonic devices, to enable high-speed data transmission, reduced energy consumption, and enhanced computational capabilities.
The company’s contributions to AI infrastructure have been widely recognized through awards and prizes. In late November, the company announced that it would expand optical engine production capacity in Malaysia to meet AI infrastructure demand.
POET Technologies Inc. (NASDAQ:POET) secured major partnerships to drive growth over the past quarter. In FQ4 2024, it won a significant design win with Foxconn Interconnect Technology (FIT) to supply 800G and 1.6T optical engines for AI and data center networks. Additionally, Luxshare Tech, a prominent Apple supplier, expanded its optical module portfolio by incorporating POET’s optical engines.
These significant developments highlight POET Technologies Inc.’s (NASDAQ:POET) potential to become a dominant player in the AI industry, driving innovation and shaping the future of optical technology.
