We recently compiled a list of the 10 Most Popular AI Penny Stocks Under $1. In this article, we are going to take a look at where Augmedix, Inc. (NASDAQ:AUGX) stands against the other popular AI penny stocks.
Into the AI Market:
The stock market is rapidly catching on to the apparent artificial intelligence trend during the last year or two. Many businesses are incorporating Artificial Intelligence technologies into their core business models to save costs, improve performance, and flourish in both current markets and emerging ones. Once, venture entrepreneur Marc Andreessen observed that “software is eating the world” by automating entire industries. It is anticipated that artificial intelligence will similarly change software. According to recent research by MIT, the United States is unequally adopting artificial intelligence, with the majority of its application occurring in big businesses and sectors like manufacturing and healthcare.
As per Grand View Research, the global artificial intelligence industry was estimated to be worth $196.63 billion in 2023, and it is predicted to grow at a CAGR of 36.6% between 2024 and 2030.
OpenAI, a private AI startup, has rapidly evolved into a prominent player in this booming market, with its valuation tripling to almost $80 billion in less than ten months following an agreement with Thrive Capital. The AI startup is recognized globally for its cutting-edge AI models, such as ChatGPT, which received a significant 1.806 billion visits in April 2024 as per SimilarWeb, DALL-E, an image-generating model, and Whisper AI for speech recognition. To lead the way in AI technology, OpenAI unveiled GPT-4o, a new AI model, in May 2024. It can engage with text and graphics and have realistic voice conversations. Macquarie’s Fred Havemeyer commended GPT-4o for its “emotional intelligence.” OpenAI’s approach to the AI revolution is unique because it collaborates with tech titans rather than competing against them. OpenAI represents a generation of AI companies linked with the giants due to the computer capacity as well as the massive financing necessary to advance artificial intelligence learning. According to CNBC Disruptor 50 companies, artificial intelligence plays a crucial role in over half of their revenue, with 34 of them describing AI as critically important to more than half of their revenue. 13 companies claimed that generative AI, specifically, is key to the majority of sales. Chairman of Sinovation Ventures, Kai-Fu Lee, expressed his belief that OpenAI would soar to the exceptional heights that a few mega-cap businesses with solid business models can achieve. “OpenAI will likely be a trillion-dollar company in the not-too-distant future.” ”This is by far the most advanced and most amazing technology, compared to anything, by a factor of 10,” Lee stated.
Methodology:
In this article, we first used a stock screener, Finviz, to list down all AI stocks trading under $1 (as of the writing of this article) with a high average trading volume of 500k to 10M. From the resultant dataset, we chose 10 stocks with the highest number of hedge fund investors, using Insider Monkey’s database of 920 hedge funds in Q1 2024 to gauge hedge fund sentiment for stocks. We have used the stock’s Revenue Growth Rate (year-over-year) as a tie-breaker in case two or more stocks have the same number of hedge funds invested.
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 medical professional interacting with a touch-screen device, emphasizing the company’s modern approach to patient care.
Augmedix, Inc. (NASDAQ:AUGX)
Number of Hedge Fund Investors: 27
One of the most popular AI penny stocks under $1 is Augmedix, Inc. (NASDAQ:AUGX), a San-Francisco-based healthcare technology company that provides medical documentation products and live clinical support services to the top healthcare systems in the United States using ambient AI technology.
The Augmedix Go smartphone app, which supports more than 50 medical specialties, and uses ambient AI technology to understand natural conversations between physicians and patients and produces thorough draft medical notes in real-time. “The Augmedix Go note reads like a clinician wrote it,” claimed Mary Kate Case, PA-C, heart and vascular care. “Other AI products I have used sound like a machine producing the note.”
In Q1 2024, Augmedix, disclosed its total revenue of $13.5 million, an incredible 40% increase from the same quarter in the previous year, where the overall sales were $9.6 million.
Manny Krakaris, Augmedix CEO, commented on the remarkable growth of the company:
“Augmedix delivered in-line first quarter performance, with 40% revenue growth, 143% net revenue retention, and 47.1% gross margins,” “We are confident about our positioning within the medical documentation market, and expect to report continued growth throughout the rest of the year. It is now clear, however, that health systems are proceeding methodically while they develop a better understanding of the capabilities of AI products.”
“We are seeing an increasing amount of interest with new and existing customers that are evaluating our AI products, Augmedix Go and Augmedix Go Assist, including active discussions for large deployments. In particular, the recently introduced ER version is resonating with health systems as it is the first fully-automated, generative AI-powered medical documentation product for acute care. Augmedix Go Assist is quickly becoming a compelling solution given its attractive mix of price and efficiency. Meanwhile, following a successful pilot, our strategic partner HCA Healthcare is planning to expand Augmedix Go to additional emergency departments within its health system.”
Overall, Augmedix’s annual revenue has also increased every year. Revenue surged from $22.17 million in 2021 to $30.93 million in 2022 and then $44.85 million in 2023. Thus, investors are hoping to gain profits, making it the most popular AI penny stock under $1.
Meanwhile, elite funds are piling into this stock as well, with hedge fund positions increasing from 26 in Q4 2023 to 27 in Q1 2024 with a collective stake of $122.124 million, giving us a clear hint that investors are bullish on Augmentix’s stock. Krystal Biotech Inc. is the largest stakeholder in the company, with 1,508,250 shares worth $268.36 million.
Overall AUGX ranks 1st on our list of the most popular AI penny stocks under $1. You can visit 10 Most Popular AI Penny Stocks Under $1 to see the other popular AI penny stocks that are on hedge funds’ radar. While we acknowledge the potential of AUGX 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 AUGX 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.
