In this article, we will be taking a look at the 5 best small-cap AI stocks. To read our detailed analysis of these stocks and the artificial intelligence sector, you can go directly to see the 10 Best Small-Cap AI Stocks.
5. Magic Software Enterprises Ltd. (NASDAQ:MGIC)
Number of Hedge Fund Holders: 7
Market Cap as of August 21: $869,220,000
Magic Software Enterprises Ltd. (NASDAQ:MGIC) is an IT company operating an integration platform for real-time AI and machine learning. The company provides proprietary application development, business process integration, vertical software solutions, and IT outsourcing software services in Israel and internationally.
In May, Magic Software Enterprises Ltd. (NASDAQ:MGIC) raised its 2022 annual revenue guidance to between $540 million and $550 million, versus the consensus estimate of just over $540 million. The company’s guidance shows expected annual growth of between 12.4% and 13.5%.
Seven hedge funds were long Magic Software Enterprises Ltd. (NASDAQ:MGIC) in the second quarter of 2022. Their total stake value was $15.6 million.
4. Perion Network Ltd (NASDAQ:PERI)
Number of Hedge Fund Holders: 14
Market Cap as of August 21: $920,860,000
Perion Network Ltd (NASDAQ:PERI) is a communication services company providing digital advertising solutions to brands, agencies, and publishers. The company operates an AI platform using machine learning to bring intelligence to various phases of different campaigns.
In August, Perion Network Ltd (NASDAQ:PERI) shares rallied after the company’s positive second-quarter earnings results, which showed revenue of $147 million, beating estimates by $0.3 million. Perion Network Ltd’s (NASDAQ:PERI) video revenue grew by 273% year-over-year. The company also reaffirmed its 2022 revenue outlook of $620 million to $640 million, versus the consensus estimate of $626 million.
In the second quarter, 14 hedge funds were long Perion Network Ltd (NASDAQ:PERI), compared to 17 hedge funds in the previous quarter. Their total stake values were $88.2 million and $131 million respectively.
3. Sumo Logic, Inc. (NASDAQ:SUMO)
Number of Hedge Fund Holders: 21
Market Cap as of August 21: $938,590,000
Sumo Logic, Inc. (NASDAQ:SUMO) is an application software company providing a cloud-native software-as-a-service platform enabling organizations to address the challenges and opportunities arising out of digital transformation and cloud computing. The company uses applications including operational, security, and business analytics to help IT operations work more effectively by leveraging AI.
Rob Owens at Piper Sandler reiterated a ‘Neutral’ rating on Sumo Logic, Inc. (NASDAQ:SUMO) shares on July 13.
In July, it was reported that Sumo Logic, Inc. (NASDAQ:SUMO) would be integrated with Gigamon’s Gigamon Hawk Deep Observability Pipeline and Gigamon ThreatINSIGHT Network Detection and Response solution. The integration will improve the reliability and security of cloud-native applications, helping the companies to optimize their cloud performance and contain the rising costs of data exchange and storage.
Our hedge fund data for the second quarter shows 21 hedge funds long Sumo Logic, Inc. (NASDAQ:SUMO), with a total stake value of $64 million.
2. Digi International Inc. (NASDAQ:DGII)
Number of Hedge Fund Holders: 14
Market Cap as of August 21: $1,220,000,000
Digi International Inc. (NASDAQ:DGII) provides business and mission-critical Internet of Things products, services, and solutions in the U.S. and globally. The company utilizes AI-based applications for various purposes, such as its accessibility interface allowing persons with disabilities to adjust website interfaces and design them to their personal needs.
For the third quarter, Digi International Inc. (NASDAQ:DGII) had EPS of $0.45, beating estimates by $0.08. The company’s revenue was $104 million, up 30.9% year-over-year and also beating estimates by $7.4 million. On August 5, Canaccord’s T. Michael Walkley reiterated a ‘Buy’ rating on Digi International Inc. (NASDAQ:DGII) shares. The analyst also raised his price target on the shares from $30 to $41.
Out of 895 hedge funds that filed 13Fs for the second quarter, 14 were long Digi International Inc. (NASDAQ:DGII). Their total stake value was $62.9 million. That was a notable increase from nine hedge funds long DGII in the previous quarter, with a total stake value of $44.3 million.
1. Docebo Inc. (NASDAQ:DCBO)
Number of Hedge Fund Holders: 15
Market Cap as of August 21: $1,350,000,000
Docebo Inc. (NASDAQ:DCBO) is an information technology company providing a cloud-based learning management system to train internal and external workforces, partners, and customers. The company’s learning platform is built on the power of artificial intelligence, helping it support personalized learning paths for its consumers.
An ‘Outperform’ rating was reiterated on Docebo Inc. (NASDAQ:DCBO) shares on June 14, by analyst Stephanie Price at CIBC.
Docebo Inc. (NASDAQ:DCBO) shares traded higher in August in light of the company’s positive second-quarter results. The company’s subscription revenue was $31.9 million, showcasing a rise of 35% year-over-year. It also brought in gross profit of $28 million, an increase of 37% compared to the same period last year.
There were 15 hedge funds long Docebo Inc. (NASDAQ:DCBO) in the second quarter, with a total stake value of $213 million.
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