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 Evolv Technologies Holdings, Inc. (NASDAQ:EVLV) 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 security team patrolling a public building with their advanced Evolv systems.
Evolv Technologies Holdings, Inc. (NASDAQ:EVLV)
Market Capitalization: $492 Million
Number of Hedge Fund Holders: 18
Evolv Technologies Holdings, Inc. (NASDAQ:EVLV) is a company specializing in AI-driven weapons detection systems for security screening. Unlike traditional metal detectors, Evolv’s touchless solutions leverage AI, cloud-based SaaS, and advanced sensors to detect potential threats without unnecessary alarms caused by harmless items. Visitors can move through the system without stopping, forming lines, or emptying pockets, significantly improving efficiency and reducing false alarms.
Evolv’s technology enables faster screening processes as it offers up to ten times the speed of older methods and cutting costs by up to 70%. The touchless approach aligns with modern demands for reduced physical contact and provides valuable analytics on visitor flow and security performance. The company primarily offers its services through multi-year subscription models, ensuring consistent revenue while delivering value to its clients. Evolv’s market includes unregulated facilities across sectors like education, healthcare, entertainment, government, and industry, representing over $20 billion in potential annual sales, according to the company’s last 10-K filings
In the third quarter of 2024, Evolv Technologies reached significant milestones. It surpassed 2 billion screenings, added 465 new subscriptions, and expanded to over 1,100 school and 400 hospital buildings. The company gained three new professional sports stadium clients and three additional Fortune 500 customers. Evolv Express screened 3 million visitors daily and detected over 500 firearms per day.
Overall, EVLV ranks 21st on our list of the 59 AI companies under $2 billion market cap. While we acknowledge the potential of EVLV 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 EVLV 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.
