The prevailing belief among investors that the artificial intelligence (AI) sector is merely a bubble has prompted discussions regarding the potential of emerging technologies within the industry. While much of the focus has traditionally been on infrastructure, particularly the hardware sectors like semiconductor chips, analysts are now shifting their attention towards how businesses can leverage AI to enhance efficiency and consumer appeal.
MarketBeat reports that some investors are increasingly recognising the importance of AI applications that extend beyond foundational technologies. As the landscape evolves, there exists a myriad of opportunities within stocks that are currently trading under $50 per share, enticing those looking for relatively low-cost investments.
Leading this list is SoundHound AI Inc. (NASDAQ: SOUN), known for its advanced voice AI solutions. The company has shown exceptional performance, with stock prices surging by over 840% in 2024. SoundHound's technology is making strides, with its services being employed across more than 10,000 restaurant locations. Notably, a potential collaboration with McDonald's, considering its implementation across 40,000 locations, exemplifies its rapid growth. SoundHound’s revenue nearly doubled year-over-year in the first three quarters of 2024; however, profitability remains elusive. Analysts have begun raising price targets for the company, indicating a generally optimistic future outlook.
Next is Symbotic Inc. (NASDAQ: SYM), a robotics warehouse automation firm that has capitalised on the growing importance of supply chain efficiency, particularly highlighted by the pandemic. Its advanced AI systems have aided large companies, including Walmart and Albertson’s, achieving a notable 58% increase in revenue year-over-year. With the company recording its first profitable quarters, analysts predict a significant 150% increase in earnings for 2025, suggesting further growth potential for the stock.
Unity Software Inc. (NYSE: U), primarily known for its gaming platform, is also drawing attention. The company recently released Unity 6, boasting enhancements that utilise AI to streamline the development process for creators of interactive content. Following a price drop of 42% in 2024, some analysts consider the current value may offer an attractive entry point for investors.
Bentley Systems Inc. (NASDAQ: BSY), with a focus on infrastructure engineering, is making strides with newly launched AI platforms that promote productivity within industries such as aerospace and defence. With revenue growth upward of 75% year-over-year, analysts are predicting continued earnings growth, further underlining its investment prospects.
DigitalOcean Holdings Inc. (NYSE: DOCN) differentiates itself as a cloud computing provider for small- to mid-sized businesses. Following significant stock price declines since its initial public offering in 2021, its entry into the GPU market in 2023 is seen as a potential catalyst for recovery, with analysts viewing a 22% upside for 2025.
Lemonade Inc. (NYSE: LMND), known for utilising AI in the insurance sector, experienced a dramatic 113% uptick in stock value during 2024. Analysts, however, remain cautious, citing potential volatility as traditional insurers ramp up their digital capabilities.
Lastly, Rekor Systems Inc. (NASDAQ: REKR), focusing on intelligent transportation solutions, has successfully integrated AI into its offerings. Although the stock saw a steep decline of about 50% in 2024, it rebounded significantly in December. Analysts project potential earnings growth, indicating that the company could reach profitability if the upward revenue trajectory continues.
Experts like Microsoft Corp. CEO Satya Nadella predict that AI will fundamentally transform a wide array of business operations, reinforcing the notion that opportunities exist within smaller, lesser-known stocks. The evolution of AI technology presents myriad possibilities for improved business practices and sustainable growth, making these stocks noteworthy in the current investment landscape.
Source: Noah Wire Services