12 Best Small Cap AI Stocks To Buy According to Hedge Funds

7. Plexus Corp. (NASDAQ:PLXS)

Market Cap as of December 2: $4.51 billion

Number of Hedge Fund Holders: 17

Plexus Corp. (NASDAQ:PLXS) is a leading electronics manufacturing services (EMS) provider that uses AI to optimize its operations, such as predictive maintenance, quality control, supply chain optimization, and robotics, to enhance efficiency, reduce downtime, and ensure high-quality product delivery. These AI applications enable it to deliver innovative solutions to its customers across various industries.

The company’s fiscal fourth-quarter 2024 performance was significantly driven by robust demand in the healthcare and life sciences sector, as reflected in the higher-than-anticipated revenue of $1.05 billion, a 2.6% year-over-year improvement. This sector’s growth was primarily due to the successful launch of new products and increased demand for engineering solutions.

Its ability to develop and manufacture complex medical devices also contributed to its strong performance in this segment. AI-driven predictive analytics were used to identify potential supply chain disruptions and optimize inventory levels, ensuring timely delivery of critical components. Plexus Corp.’s (NASDAQ:PLXS) focus on innovation, coupled with the strategic use of AI, positioned it well to capitalize on the growing demand for advanced medical devices and life science instruments.

Bernzott Capital Advisors US Small Cap Value Fund stated the following regarding Plexus Corp. (NASDAQ:PLXS) in its first quarter 2024 investor letter:

“Within Information Technology, our position in Plexus Corp. (NASDAQ:PLXS) also hurt as the stock declined 12% as their earnings release was mixed due to temporary destocking amongst their customers, more specifically within the healthcare segment. Quarterly results were below expectations as the company felt the negative impact from de-stocking from their customers, more specifically within their healthcare segment. This should be temporary with growth reaccelerating in future quarters. Backlog continues to grow which gives us confidence going forward. We maintained our position.”