We recently published a list of the 10 Most Popular AI Penny Stocks to Buy Under $5. In this article, we are going to take a look at where Lantronix, Inc. (NASDAQ:LTRX) stands against other popular AI penny stocks to buy under $5.
Umesh Sachdev, the CEO of Uniphore, recently appeared on CNBC on March 19 to talk about what he calls the ‘the third year of a ten-year AI buildout’. Sachdev shared his perspective on the GPU Technology Conference (GTC) conference during this conversation. GTC is a global AI-focused event held semi-annually that brings together developers, engineers, researchers, and IT professionals to explore advancements in AI, ML, computer graphics, and autonomous machines. Sachdev attended both Jensen Huang’s keynote and spoke on a panel afterward. He highlighted several announcements that caught his attention. These included the Vera Rubin chips and the next-generation Blackwell Ultra chips, which were expected advancements in computing power.
However, what stood out most to him was Huang’s discussion around Agentic AI and physical AI. He explained that AI agents are becoming smarter and beginning to reason. This development is significant for customers like insurance companies, banks, telecom companies, and manufacturing firms. Sachdev noted that AI agents are already assisting employees or replacing certain jobs within these companies, and are performing tasks faster and more efficiently. Similarly, physical AI robots are being implemented in manufacturing setups with guardrails, which showcases early applications of these technologies. He believes these advancements will lead to what he calls an age of abundance, which will ultimately improve free cash flow for many publicly traded companies and create a bright future for AI in the enterprise.
Our Methodology
We sifted through financial media reports and stock screeners to compile a list of the top AI penny stocks that were trading under $5 as of March 24. We then selected the 10 AI stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q4 2024. The hedge fund data was sourced from Insider Monkey’s database which tracks the moves of over 900 elite money managers.
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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
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Lantronix, Inc. (NASDAQ:LTRX)
Share Price as of March 24: $2.71
Number of Hedge Fund Holders: 17
Lantronix, Inc. (NASDAQ:LTRX) develops and markets industrial and enterprise IoT products and services globally. It specializes in embedded IoT solutions that use AI and ML for data analysis and processing. It provides IoT compute products, wired and wireless connectivity solutions, and a SaaS platform for deploying and managing IoT devices.
The company is focusing on the growing Edge AI market by integrating AI into its hardware and software solutions. It’s working closely with Qualcomm to incorporate its AI framework into Lantronix, Inc.’s (NASDAQ:LTRX) Edge AI systems to enhance real-time analytics. The company is developing solutions for various industries, which include banking, electronics manufacturing, and agriculture. The acquisition of NetComm for $6.5 million further expands the company’s connectivity capabilities, which is crucial for Edge AI deployments.
The Edge AI market is projected to reach $76 billion by 2031. Lantronix, Inc. (NASDAQ:LTRX) is positioning itself to capitalize on this market. In FQ2 2025, the company reported a revenue of $31.2 million. The NetComm acquisition is expected to add $300,000 to $400,000 in quarterly operating expenses. For FQ3, revenue is projected between $27 and $31 million.
180 Degree Capital Corp is optimistic about the company’s future and stated the following regarding Lantronix, Inc. (NASDAQ:LTRX) in its Q2 2024 investor letter:
“More recently, we have been working behind the scenes with the management and board of Lantronix, Inc. (NASDAQ:LTRX) on ways to solidify the strong foundation of the company and set it up for success and significant value creation for stockholders in the future. We believe LTRX’s new CEO, Saleel Awsare brings an interesting and successful background to LTRX. What we believe he needed to be in the best position for success were board members who have experience navigating the challenges unique to microcapitalization companies. Following multiple discussions, we introduced Saleel and his board to Narbeh Derhacobian, the former Chief Executive Officer and founder of our former portfolio company, Adesto Technologies, Inc., and one of Adesto’s board members, Kevin Palatnik, who has significant experience as a CFO at multiple related businesses. We were pleased to see that LTRX’s board saw the same value that we do in these individuals, in terms of helping Saleel and his team to have the best opportunities to achieve multiple catalysts that could lead to material increases in value for LTRX and its stockholders.”
Overall, LTRX ranks 2nd on our list of the most popular AI penny stocks to buy under $5. As we acknowledge the growth potential of LTRX, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than LTRX 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.
