In this article, we will take a look at the 5 best AI penny stocks to buy now. To see more such companies, go directly to 10 Best AI Penny Stocks to Buy Now.
5. SoundHound AI, Inc. (NASDAQ:SOUN)
Number of Hedge Fund Holders: 13
AI-based speech recognition company SoundHound AI, Inc. (NASDAQ:SOUN) shares have gained about 50% year to date through August 7. SoundHound AI, Inc. (NASDAQ:SOUN) is one of the biggest gainers in 2023 thanks to the AI boom and continuous relevance of AI in the news cycle. In June SoundHound AI, Inc. (NASDAQ:SOUN) said it was selected to be included in the Russell 2000 and broad-market Russell 3000 Indexes effective June 23, 2023.
A total of 13 hedge funds in Insider Monkey’s database of 943 funds reported owning stakes in SoundHound AI, Inc. (NASDAQ:SOUN) as of the end of the first quarter.
SoundHound AI, Inc. (NASDAQ:SOUN)’s management talked about the AI opportunity in the company’s Q1 earnings call:
“We also stay focused on the business and the opportunity in front of us. Artificial intelligence is rightly getting a lot of attention these days and our opportunity has only expanded. At SoundHound, we make conversations with technology more natural and seamless, and the demand for that has only become stronger. Large language models, Generative AI and the pervasiveness of chatbots are unearthing entirely new use cases every day. The opportunity set and adoption curves will accelerate rapidly, and we are at the forefront of this next major inflection in technology. We continue to expand our voice-enabled ecosystem and had strong growth, even with Q1 typically our seasonally smallest quarter of the year from a revenue standpoint. This could have only been possible with our strong customer engagement and streamlined execution that we expect will only further improve from here.”
4. Pagaya Technologies Ltd. (NASDAQ:PGY)
Number of Hedge Fund Holders: 13
FinTech company Pagaya Technologies Ltd. (NASDAQ:PGY) uses AI to gauge risk and help companies understand and make sense of thousands of data points.
Pagaya Technologies Ltd. (NASDAQ:PGY) stock has gained about 132% year to date through August 7. Last month, B. Riley analyst Hal Goetsch started covering the stock with a Buy rating. The analyst praised Pagaya Technologies Ltd. (NASDAQ:PGY)’s technology of credit risk calculation and called it better than traditional models.
The analyst said Pagaya Technologies Ltd. (NASDAQ:PGY)’s “AI models produce lower loss rates at similar approval rates or much higher approval rates at similar loss rates than traditional underwriting bank credit models.”
As of the end of the first quarter of 2023, 13 hedge funds tracked by Insider Monkey had stakes in Pagaya Technologies Ltd. (NASDAQ:PGY).
3. FiscalNote Holdings, Inc. (NYSE:NOTE)
Number of Hedge Fund Holders: 15
Market intelligence and data company FiscalNote Holdings, Inc. (NYSE:NOTE) ranks 3rd in our list of the best AI penny stocks according to hedge funds. FiscalNote Holdings, Inc. (NYSE:NOTE) says it uses AI across its software systems and solutions. In June, FiscalNote Holdings, Inc. (NYSE:NOTE) said it launched FiscalNote Risk Connector, which uses AI to help companies reduce risks across their supply chains.
In July FiscalNote Holdings, Inc. (NYSE:NOTE) jumped on reports that the company received takeover interest from both private equity and strategic buyers.
Out of the 943 hedge funds in Insider Monkey’s database, 15 hedge funds reported having stakes in FiscalNote Holdings, Inc. (NYSE:NOTE).
2. GeneDx Holdings Corp. (NASDAQ:WGS)
Number of Hedge Fund Holders: 16
GeneDx Holdings Corp. (NASDAQ:WGS) is a genomics company that uses data analytics and AI to make advances in the medical diagnostics and genome testing domains. In May, GeneDx Holdings Corp. (NASDAQ:WGS) posted Q1 results. GAAP EPS in the period came in at -$3.04 missing estimates by $0.40. Revenue in the period came in at $43.14 million, surpassing estimates by $3.93 million.
As of the end of the first quarter of 2023, 16 hedge funds tracked by Insider Monkey reported owning stakes in GeneDx Holdings Corp. (NASDAQ:WGS).
1. Nerdy, Inc. (NYSE:NRDY)
Number of Hedge Fund Holders: 22
Online learning platform Nerdy, Inc. (NYSE:NRDY) ranks 1st in our list of the best AI penny stocks to buy now according to hedge funds. Nerdy, Inc. (NYSE:NRDY) uses AI to connect students and tutors.
In May Nerdy, Inc. (NYSE:NRDY) posted Q1 results. Adjusted income in the period came in at $0.5 million. Revenue in the quarter jumped 5% year over year to $49.2 million. Nerdy, Inc. (NYSE:NRDY) said its revenue growth was driven by strong adoption of Learning Memberships, and growth in consumer business, among other factors.
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