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.
10. Serve Robotics Inc. (NASDAQ:SERV)
Share Price as of November 27: $8.78
Number of Hedge Fund Holders: 5
Serve Robotics Inc. (NASDAQ:SERV) is a robotics company that develops and operates autonomous delivery robots. Using advanced AI and machine learning, its self-driving robots are revolutionizing the way goods and services are delivered. By navigating complex urban environments and making real-time decisions, it’s at the forefront of AI-driven logistics, aiming to reduce emissions and improve efficiency.
The company is rapidly expanding its fleet of AI-powered delivery robots. It’s on track to deploy 2,000 robots by the end of 2025, aiming for $60-$80 million in annual revenue. The third-generation robots are rolling off the assembly line ahead of schedule and are already performing well in certification testing. These advanced robots are designed to be more efficient, reliable, and capable of navigating complex urban environments.
To support this growth, the company made significant strides in optimizing its operations. The daily active robots increased by 23% sequentially, and their average daily supply hours increased by 21%. These improvements have led to a 49% increase in delivery revenue quarter-over-quarter. With a fleet of 59 active robots and a planned expansion to 250 robots by Q1 2025, Serve Robotics Inc. (NASDAQ:SERV) is well-positioned to capitalize on the growing demand for autonomous delivery services.
9. eGain Corp. (NASDAQ:EGAN)
Share Price as of November 27: $5.24
Number of Hedge Fund Holders: 6
eGain Corp. (NASDAQ:EGAN) provides customer service software solutions that help businesses centralize knowledge, automate interactions, and optimize omnichannel service operations. It specializes in AI-powered customer service and support solutions, with products utilizing AI to automate tasks, improve customer interactions, and provide valuable insights. The company recently unveiled its latest innovation, eGain AI Agent, at the Solve 24 event in Chicago, a cutting-edge conversational self-service solution.
By integrating with the eGain Hub and tapping into enterprise data, eGain AI Agent goes beyond traditional FAQ-based systems to provide comprehensive guidance and resolve complex customer inquiries. This innovative approach eliminates the need for clients to build solutions from scratch, saving time and resources.
eGain Corp.’s (NASDAQ:EGAN) solution-oriented approach, which focuses on delivering working solutions and partnering with clients, differentiates the company from tool-centric providers. By addressing the operationalization gap and offering a full-stack solution, it empowers businesses to harness the potential of AI and drive significant improvements in customer satisfaction and operational efficiency, positioning the company well within its industry for success.
8. Veritone Inc. (NASDAQ:VERI)
Share Price as of November 27: $2.73
Number of Hedge Fund Holders: 6
Veritone Inc. (NASDAQ:VERI) is an AI company that specializes in turning unstructured data into valuable insights. Its core product, aiWARE, is an AI operating system that uses advanced machine learning algorithms to analyze vast amounts of data. This enables businesses across various industries to make informed decisions, improve efficiency, and gain a competitive edge.
The company has successfully divested its legacy Media Agency business, Veritone One, in a deal valued at up to $104 million in Q3 2024. The divestiture allows Veritone to concentrate its efforts on its core competency: delivering cutting-edge AI solutions through its enterprise AI software, applications, and aiWARE platform. As a pure-play AI enterprise software company, Veritone Inc. (NASDAQ:VERI) is well-positioned to serve over 3,000 customers. aiWARE is a key differentiator, providing a robust foundation for developing and deploying AI solutions.
The AI landscape is rapidly evolving, with a shift towards SaaS. While LLMs are becoming increasingly accessible, the real value lies in building innovative applications on top of them. aiWARE is at the forefront of this trend, offering great future financial prospects for the company.
7. Cerence Inc. (NASDAQ:CRNC)
Share Price as of November 27: $6.47
Number of Hedge Fund Holders: 10
Cerence Inc. (NASDAQ:CRNC) provides AI-powered virtual assistant solutions for the mobility and transportation industry. Its solutions include speech recognition, natural language understanding, and text-to-speech technologies, enhancing the user experience in vehicles. The company has a strong focus on GenAI and LLMs. Its proprietary AI platform, powered by LLMs, is driving innovation in the automotive industry.
The recent launch of CaLLM Edge, the first LLM running in automotive on the Edge, enables advanced and simplified voice interaction, even when the vehicle is offline. This groundbreaking technology, developed in collaboration with Microsoft, demonstrates Cerence Inc.’s (NASDAQ:CRNC) commitment to pushing the boundaries of in-vehicle AI.
Its strong financial performance and strategic focus on AI position the company for continued growth and success in the years to come. Cerence Inc. (NASDAQ:CRNC) has reported its FQ4 and full-year 2024 results, highlighting a strategic focus on cost reduction and operational efficiency. The company exceeded FQ4 2024 revenue expectations, generating $54.81 million, driven by decreased operating expenses, although marking a 32.14% year-over-year revenue drop.
By leveraging LLMs, Cerence Inc. (NASDAQ:CRNC) is transforming the in-car experience. The company’s AI solutions enable natural language interaction, allowing drivers to control various vehicle systems using simple voice commands. The company is poised to drive future growth and create long-term value for shareholders.
Meridian Contrarian Fund stated the following regarding Cerence Inc. (NASDAQ:CRNC) in its Q2 2024 investor letter:
“Cerence Inc. (NASDAQ:CRNC) develops human-automotive interface software that provides drivers and passengers with applications ranging from infotainment to safety and, eventually, autonomous driving. We became shareholders when the company was spun off from a previous holding and the market assigned little value to the new company. The stock performed strongly for us initially and we were able to harvest significant profits. We maintained a position despite weak results over the past two years due to our belief that Cerence’s large market share, with software in over 50% of cars globally, should lead to significant growth opportunities. During the quarter the stock pulled back on missed earnings and reduced full-year and long-term forecasts. This continued poor fundamental performance convinced us that we might be wrong about the market opportunity, and we sold our entire position.”
6. SoundHound AI Inc. (NASDAQ:SOUN)
Share Price as of November 27: $7.61
Number of Hedge Fund Holders: 11
SoundHound AI Inc. (NASDAQ:SOUN) develops independent voice AI solutions that enable businesses to create high-quality conversational experiences. Its products include voice assistant platforms, natural language understanding, and speech recognition technologies, serving automotive, TV, IoT, and customer service industries.
The company’s Amelia AI Agents have processed over 100,000 customer calls for Apivia Courtage, a leading French insurance broker, as reported in November. Amelia AI Agents are advanced AI-powered virtual assistants that can handle customer inquiries, provide information, and resolve issues, improving efficiency and customer satisfaction. This AI-powered solution has reduced the workload of human agents by nearly 20%, enabling them to focus on more complex tasks.
SoundHound AI Inc.’s (NASDAQ:SOUN) strategic focus on AI has driven significant growth, with revenue increasing by 89.13% year-over-year in Q3 2024. This impressive growth is fueled by the increasing adoption of voice-based interactions and the growing demand for AI-powered customer service solutions.
Its advanced AI engine has enabled it to expand its customer base and enter new markets. As SoundHound AI Inc. (NASDAQ:SOUN) continues to push the boundaries of AI, it’s well-positioned to capitalize on the growing demand for intelligent voice-based solutions and drive future growth.
5. Fastly Inc. (NYSE:FSLY)
Share Price as of November 27: $7.95
Number of Hedge Fund Holders: 14
Fastly Inc. (NYSE:FSLY) operates an edge cloud platform that helps businesses deliver digital experiences faster and more securely. It offers services like content delivery networks, security solutions, and video streaming, serving industries such as technology, media, and finance. Its edge cloud platform uses AI and machine learning to optimize content delivery, security, and performance.
The company reported strong third-quarter 2024 results, with notable progress in diversifying its revenue base, growing its quarterly revenue by 7.35% as compared to the year-ago period. Furthermore, it achieved a 20% growth in revenue outside of its top 10 customers, demonstrating reduced reliance on a few large accounts.
A major highlight for the company was the advancement of its AI accelerator, an AI proxy designed to enhance performance and reduce costs for applications utilizing LLMs. It expanded LLM support to include Google Gemini, in addition to OpenAI. The AI accelerator is expected to be generally available by the end of the year.
By leveraging the power of the company’s platform, the AI accelerator can dramatically reduce latency for tasks like answering queries, which typically take several seconds on traditional cloud platforms. This is achieved by optimizing request routing and utilizing the edge network. Additionally, the accelerator helps lower the overall cost of AI solutions by reducing the reliance on central cloud infrastructure and enabling efficient use of edge resources.
The company’s innovative AI accelerator is poised to revolutionize the AI landscape. By significantly reducing latency and costs associated with AI applications, this cutting-edge technology positions Fastly Inc. (NYSE:FSLY) as a leader in AI innovation.
4. Domo Inc. (NASDAQ:DOMO)
Share Price as of November 27: $9.34
Number of Hedge Fund Holders: 15
Domo Inc. (NASDAQ:DOMO) provides a cloud-based business intelligence platform that connects organizations’ people, data, and systems. Its platform offers real-time insights and analytics that are accessible across various devices, empowering businesses to make data-driven decisions. It uses AI to automate data ingestion, processing, and visualization.
Recently in November, this company partnered with Bond Vet, a renowned veterinary clinic, to revolutionize pet care through the power of AI. By integrating Domo Inc.’s (NASDAQ:DOMO) advanced analytics platform, Bond Vet is streamlining its operations and enhancing patient care.
Before adopting Domo Inc. (NASDAQ:DOMO), Bond Vet faced challenges in managing and analyzing data from various sources. This manual process was time-consuming and hindered the ability to derive actionable insights. With the company’s AI-powered analytics, Bond Vet can now efficiently consolidate and analyze data, uncovering valuable trends and patterns.
By harnessing the power of AI, Bond Vet can optimize its operations in several key areas, including clinical practices, financial management, marketing strategies, and customer service. Domo Inc.’s (NASDAQ:DOMO) partnership with Bond Vet demonstrates the transformative power of data and AI, and also positions the company well to grow from the increasing demand for AI solutions, creating shareholder value in return.
3. TTEC Holdings Inc. (NASDAQ:TTEC)
Share Price as of November 27: $5.16
Number of Hedge Fund Holders: 24
TTEC Holdings Inc. (NASDAQ:TTEC) provides technology-enabled solutions for digital and live interactions. It offers a range of services, including contact center as a service, AI-powered analytics, and omnichannel customer care. Its solutions serve various industries, such as healthcare, finance, and technology. It remains committed to its strategy of enhancing its portfolio of AI-enabled CX solutions. These solutions are technologies that use AI to enhance customer experiences by automating tasks, personalizing interactions, and providing data-driven insights.
A key focus area is helping clients navigate the complexities of AI implementation. While AI offers significant potential benefits, clients are concerned about the necessary investments in infrastructure, data, and organizational readiness. TTEC Holdings Inc. (NASDAQ:TTEC) is addressing these concerns by providing guidance on AI adoption, piloting AI solutions, and demonstrating tangible results. It’s expected to close more than 60 new strategic clients in 2024.
Furthermore, it’s working closely with clients to integrate AI into their existing CX technology stacks. By combining AI with contact centers, CRM, and analytics platforms, clients can achieve greater efficiency, improve customer satisfaction, and strengthen their brand differentiation. ~45% of the company’s top 100 clients have deployed well-defined AI projects in 2024.
To facilitate AI adoption, TTEC Holdings Inc. (NASDAQ:TTEC) has created a technology innovation environment called SandcastleCX. This platform enables clients to test, learn, and deploy AI solutions in a low-risk environment. The company is also leveraging its technology management approach, SurroundCX, to provide continuous technology optimization and support. Overall, it’s well-positioned to capitalize on emerging opportunities and help clients realize the full potential of AI.
2. Applied Digital Corp. (NASDAQ:APLD)
Share Price as of November 27: $9.74
Number of Hedge Fund Holders: 26
Applied Digital Corp. (NASDAQ:APLD) provides digital infrastructure solutions and cloud services for high-performance computing and AI industries. It offers data center hosting, GPU computing solutions, and HPC hosting services to support various applications, including cryptocurrency mining and AI workloads.
The company continues expanding its high-performance cloud computing business, specifically designed to power demanding AI applications. Its focus on AI-driven solutions has fueled significant growth, as evidenced by the fulfillment of existing contracts and the pursuit of new opportunities. As of the end of the first quarter of fiscal 2025, Applied Digital Corp. (NASDAQ:APLD) had 6 AI clusters operational, demonstrating its commitment to providing scalable and powerful computing infrastructure.
Applied Digital Corp. (NASDAQ:APLD) has made substantial progress in optimizing its financial structure. The company is amending the lease financing for its GPUs, which is expected to be finalized in the current quarter. This amendment will allow for the amortization of GPU value over its useful life, significantly improving financial reporting and aligning it with the long-term economics of the business.
The recent investment round has elevated its visibility in the market, attracting attention to its innovative cloud solutions. The company plans to deploy additional AI clusters starting in the second half of its fiscal year 2025, further solidifying its position as a leading provider of AI-powered cloud services.
1. Alight Inc. (NYSE:ALIT)
Share Price as of November 27: $8.02
Number of Hedge Fund Holders: 40
Alight Inc. (NYSE:ALIT) is a global technology company that provides cloud-based human capital management solutions, with services like employee benefits, healthcare navigation, and financial wellbeing, empowering organizations to improve employee satisfaction and productivity. It utilizes AI and machine learning to automate processes, improve decision-making, and enhance employee experience.
Alight LumenAI is this company’s next-generation AI engine, specifically designed to make the Alight Worklife platform better. The Worklife platform is designed to improve the overall employee experience, with the help of AI and analytics. LumenAI is designed to enhance this platform by integrating new and existing AI capabilities into a unified ecosystem. It empowers organizations to unlock the full potential of AI, offering a range of benefits including personalized experiences, intelligent automation, and data-driven insights. The company’s commitment to AI innovation is evident in its strategic investments in AI talent, infrastructure, and governance.
With its powerful Alight Worklife platform and experienced team, the company is uniquely equipped to guide clients on their employee journey. The successful development of the Alight Worklife platform has streamlined operations and enhanced agility, enabling the company to better meet client needs, as well as meet its long-term financial goals.
Polen U.S. Small Company Growth Strategy stated the following regarding Alight, Inc. (NYSE:ALIT) in its Q3 2024 investor letter:
“We exited four positions during the quarter, including SiTime, AppFolio, RH, Doximity, and Alight, Inc. (NYSE:ALIT). Our position in Alight, a benefits outsourcing and business process-as-a-service company, was an unsuccessful investment. We decided to move on due to activist pressure that led to a breakup of the business. We were dissatisfied with both the plan and the new standalone business. This culminated with the CEO leaving and uncertainty over the company’s long-term strategic direction. As a result, we felt it was time to move on with better investment ideas in our pipeline.”
As we acknowledge the growth potential of Alight Inc. (NYSE:ALIT), our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than ALIT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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