Examples of AI Penny Stocks to Watch

The use of AI is growing in popularity alongside low-value penny stocks. Here's all you need to know.

By Marcel Deer

Edited by Petar Milenkovic

Published May 19, 2024.

a hand touching a coin on top of a pile of coins

The inexorable march of artificial intelligence (AI) is continuing unabated, and several AI stocks could influence the markets in the coming years. With the NASDAQ AI composite jumping nearly 22% in 2023, thanks to a buzz around generative AI, many argue that now is potentially the best time to learn about AI penny stocks.
Note: Fortrade offers the ability to trade the price changes of AI penny stocks with CFDs and NOT to buy/sell ownership of the stocks themselves. All the information in this blog is purely educational and should NOT be considered advice.
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Understanding AI Penny StocksAI penny stocks are low-priced stocks in companies specializing in AI applications or technology, such as certain biotech companies. The typical price range for AI penny stocks starts under $1 and may incorporate any share valued below $5.
» It all begins here: How to start trading penny stocks online﻿
Why AI Penny Stocks Could Be Worth WatchingAI integration into various industries and markets is increasing rapidly, expanding AI's role in everyday business.
AI is a high-innovation industry that is developing rapidly. As a result, the growth potential for AI penny stocks is high if companies can capitalize on emerging AI trends and produce pioneering new uses for AI technology.
With AI penny stocks offering affordable prices for investors due to their low value and no minimum pricing requirements, AI and penny stocks could be a great match in future.
» Stay up to date: Learn about AI algorithmic trading﻿
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3. AI Penny Stocks1. SoundHound AISoundHound AI spans several sectors, from television to the Internet of Things, automotive, and customer service, all built on its unique proprietary technology. 
SoundHound AI has built an impressive array of strategic partnerships, from electric vehicle manufacturers to data centers, contributing to its outstanding $31 million revenue in 2022.
» Don't miss our blog on stock trading for beginners in 6 easy steps﻿
2. Lantern PharmaLantern Pharma is positioning itself as a biotech behemoth in the making. They are doing this by harnessing the possibilities offered by AI to revolutionize therapeutic treatments. Rather than spending capital on drug discovery, Lantern is using AI applications to help speed up the process and cut costs.
For example, Lantern is exploring an AI application calibrated to predict a compound's ability to permeate the blood-brain barrier, a critical factor in assessing the effectiveness of brain cancer drugs. With its AI-enabled platform RADR receiving FDA clearance for Phase 1 trials, there is a potential for Lantern to unlock annual market potential of up to $13 billion.
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3. Remark HoldingsMany consider Remark Holdings to be one of the leading emerging developers and manufacturers of AI solutions. Their portfolio of products positions them firmly to take advantage of the ongoing expansion in AI adoption.
Their AI solutions include facial recognition and retail analytics, which have helped Remark Holdings to strategically position itself across several industries such as retail, hospitality, and healthcare. This multifaceted approach could give Remark an edge in the growing AI sector.
» Bigger margins! Learn about the fundamentals of CFD stock trading﻿
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Risks and Considerations With Trading AI Penny StocksVolatilityThe low-value, high-potential nature of penny stocks gives them greater volatility than higher-value shares. Although penny stocks can see quick price pumps in a short period, they can also lose value equally fast.
Lack of LiquidityLow-value stocks, including AI penny stocks, often suffer from low trading volumes. Low trading values and limited market liquidity make it more difficult for traders to achieve their entry or exit prices, meaning executing larger orders without impacting the stock's price can be more challenging. This can lead to delays in completing trades and increased transaction costs.
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Research and Due DiligenceA great way for investors to protect themselves from potential losses when trading AI penny stocks is to research the market and subject matter thoroughly. Understanding the potential of AI and real-world applications of AI technology can help identify the best potential stocks. 
Meanwhile, due diligence on individual stocks, including previous price behavior, helps investors build confidence.
» Start research here: The main drivers of stock prices﻿
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Exploring AI Penny Stocks for the FutureAI penny stocks offer an affordable price and may have growth potential, but also come with plenty of risk. Research and due diligence before investing are crucial to making well-informed investment decisions and reducing the potential losses that might be incurred.
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