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 Xometry, Inc. (NASDAQ:XMTR) 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 machinist operating a CNC machine in a well-lit facility, scrutinizing the quality of a part.
Xometry, Inc. (NASDAQ:XMTR)
Market Capitalization: $1.724 Billion
Number of Hedge Fund Holders: 7
Xometry, Inc. (NASDAQ:XMTR) is an innovative company that leverages artificial intelligence to revolutionize the manufacturing industry. It operates a digital marketplace and offers cloud-based services to assist manufacturers in growing their businesses and to help buyers build efficient, resilient supply chains. One of its key features, the Xometry Instant Quoting Engine, uses vast amounts of data to instantly analyze complex parts, match buyers with appropriate suppliers around the world, and offer accurate pricing and delivery estimates. Additionally, Xometry owns the Thomasnet industrial sourcing platform, further supporting businesses in finding suppliers and managing procurement processes.
Xometry (NASDAQ:XMTR) reported that its AI-driven global custom-manufacturing marketplace now includes over 4,200 active suppliers, a 34% increase, or 780 more suppliers, in the first three quarters of 2024, nearly triple the number since 2021.
The AI-powered marketplace is central to the rapid digital transformation of the manufacturing industry, using proprietary technology to reduce development cycles, improve efficiencies, and build more resilient supply chains. Xometry’s (NASDAQ:XMTR) supplier network spans across all 50 U.S. states and three continents, offering a wide range of manufacturing processes, materials, and finishes.
Overall, XMTR ranks 3rd on our list of the 59 AI companies under $2 billion market cap. While we acknowledge the potential of XMTR 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 time frame. If you are looking for an AI stock that is more promising than XMTR 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.
