We recently published a list of Complete List of All AI Companies Under $2 Billion Market Cap. In this article, we are going to take a look at where DarioHealth Corp. (NASDAQ:DRIO)stands against other AI companies under $2 billion market cap.
It’s clear that AI holds immense promise but it comes with significant risks. Some of the concerns that the market has include overreliance on a few key players, shifts in demand toward smaller competitors, and the broader impact of AI-driven market trends on earnings and valuations. While AI offers opportunities, managing risks such as customer concentration, economic headwinds, and market volatility will be crucial for its sustainable growth and integration.
Navigating AI Expectations and Market Dynamics
On CNBC ‘Fast Money,’ a discussion between traders highlighted concerns about elevated expectations for AI, especially in the chip market, with NVDA as a prime example. Past patterns in the semiconductor giant’s stock suggest potential declines, with customer concentration being a significant risk. Some believe demand for high-end chips could shift to smaller semiconductor companies. They also discussed that broader market performance might improve as other sectors gain traction, especially during earnings season, which is expected to influence investor sentiment more than AI and GLP-1 trends.
They mentioned that the key risks for earnings include the strong U.S. dollar, rising rates, and policy uncertainties, which may impact large-cap companies. While recent PPI data offered some relief, the bond market remains firm, with 10-year yields approaching 5%. Expectations for CPI and PCE figures are mixed, with potential reacceleration seen as a headwind for markets in a higher rate environment. Earnings and economic data were considered critical factors to watch by the traders.
Our Methodology
For this article, we scoured our database as well as several ETFs and media reports to find all possible AI stocks under $2 billion. We then listed the stocks in ascending order of their market cap. We also added the hedge fund sentiment around each stock which was taken from Insider Monkey’s database of 900 hedge funds.
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).
A laboratory technician checking the results of a blood glucose monitoring system.
DarioHealth Corp. (NASDAQ:DRIO)
Market Capitalization: $23 Million
Number of Hedge Fund Holders: 4
DarioHealth Corp. (NASDAQ:DRIO) is a digital health company focused on improving chronic condition management through its multi-condition digital therapeutics platform. The platform uses data analytics, AI, and personalized coaching to support diabetes, hypertension, musculoskeletal health, weight management, and behavioral health. By encouraging behavior change, Dario is focusing on empowering individuals and transforming digital healthcare. At the company’s Q3 2024 earnings call, the company’s Chief Commercial Officer, Steven Nelson said:
“With each client engagement, we are also gathering valuable insights that fuel our AI capabilities, enhancing both client experiences and clinical outcomes. As we look ahead, I am excited to build on our momentum, executing with precision and a relentless focus on sustainable long-term growth. Our road map is clear, and we are fully committed to driving transformative impact across the health care landscape, delivering enduring value for our clients and realizing our vision of a healthier, more connected world.”
The company’s CEO, Erez Raphael added:
“Looking ahead, we are also keep investing in AI and data-driven personalization. Our proprietary data enable us to drive innovation in areas like drug discovery, consumer engagement and targeted interventions. By integrating generative AI and micro services, we are creating a new revenue opportunity, further strengthening our ability to activate and engage members effectively and offering unparalleled value to our client.”
Overall, DRIO ranks 51st on our list of AI companies under $2 billion market cap. While we acknowledge the potential of DRIO as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than DRIO but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.