Summary: This guide explores the top 3 artificial intelligence penny stocks to buy in 2024. Each of these stocks is available on our go-to brokerage platform, Interactive Brokers.
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What are artificial intelligence penny stocks?
Artificial intelligence penny stocks are shares of companies involved in the development, deployment, or application of AI technologies that are priced below $5 per share. These stocks often belong to smaller companies with promising technologies but lower market capitalization compared to industry giants.
Investing in penny stocks can be riskier than traditional stocks, but it also presents the opportunity for substantial gains. With AI becoming increasingly integrated into various sectors, the potential for growth in this niche is considerable.
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3 best artificial intelligence penny stocks to buy in 2024
After conducting thorough research on the best AI penny stocks to buy in 2024, we’ve come up with our top 3 picks:
- Pagaya Technologies Ltd. (NASDAQ: PGY);
- Himax Technologies, Inc. (NASDAQ: HIMX);
- Caanan Inc. (NASDAQ: CAN).
Pagaya Technologies Ltd. (PGY)
Pagaya Technologies operates as a financial technology company, employing AI and machine learning to optimize asset management efficiency. The company’s algorithms scrutinize vast datasets to pinpoint investment opportunities and manage risk.
Investors are drawn to Pagaya’s innovative approach to financial technology, potentially disrupting traditional asset management and striving for superior returns through AI-driven decision-making.
However, the financial industry’s stringent regulations pose a risk, as any changes could impact Pagaya’s operations. Additionally, the intense competition in the fintech space presents a challenge to market penetration.
Pagaya Technologies Ltd. stock price today
Himax Technologies, Inc. (HIMX)
Himax Technologies serves as a semiconductor solution provider pivotal in AI-related hardware development. Specializing in the production of display drivers and imaging solutions for applications like augmented reality and virtual reality, the company is well-positioned to benefit from the growing demand for AI-related hardware.
Despite its diverse product portfolio, Himax Technologies faces risks due to the cyclical nature of the semiconductor industry. Economic downturns can impact demand for its products, and the perpetual competition from other semiconductor manufacturers remains a constant concern.
Himax Technologies, Inc. stock price today
Caanan Inc. (CAN)
Canaan Inc. is a prominent manufacturer of cryptocurrency mining hardware that has recently expanded into AI hardware development. Leveraging its expertise in hardware design, the company positions itself as a potential player in the AI industry’s infrastructure. Investors are enticed by Canaan’s strategic move into AI hardware, aligning with the escalating demand for powerful computing solutions.
The company’s established position in the cryptocurrency mining sector offers a unique angle for investors seeking exposure to multiple high-growth areas. However, the cryptocurrency market’s inherent volatility poses a significant risk, and adverse developments in this sector could impact Canaan’s financial performance. Additionally, intense competition in the AI hardware space remains a noteworthy concern.
Caanan Inc. stock price today
Where to buy artificial intelligence penny stocks?
Investing in AI stocks can be done through various online brokerage platforms, we recommend you consider Interactive Brokers (IBKR):
- Commission-free stock trading;
- Global stock-trading on 90+ market centers;
- Fractional shares available;
- Extra income on fully paid shares;
- Lowest financing rates for margin accounts in the industry;
- No account minimum.
Best Platform for Worldwide Stock Trading & Investing
-
Highly trusted multi-asset broker with clients in over 200 countries
-
Trade on 150 markets globally from a single platform (stocks, ETFs, futures, currencies, crypto & more)
-
Low commissions starting at $0 with no platform fees or account minimums
-
Easily fund your account and trade assets in 26 currencies
-
IBKR pays up to 4.58% interest on cash balances of $10k or more
Pros and cons of buying artificial intelligence penny stocks?
Pros
- High growth potential: The AI industry is expanding rapidly, offering significant growth opportunities for companies involved in its development;
- Affordability: Penny stocks provide an affordable entry point for investors looking to gain exposure to the AI sector without a large initial investment;
- Innovation and disruption: Many penny stocks in the AI space are innovators, potentially disrupting established industries and creating new markets.
Cons
- High risk: Penny stocks are inherently riskier than more established stocks, and the potential for loss is greater;
- Lack of information: Smaller companies may not have as much publicly available information, making it challenging for investors to conduct thorough research;
- Volatility: Penny stocks can experience extreme price volatility, influenced by market sentiment and speculation.
For more information about investing in AI stocks, feel free to check out our other guides, including:
Common mistakes to avoid when buying artificial intelligence penny stocks
- Ignoring due diligence: Conduct thorough research on the company’s financial health, market position, and growth potential before investing;
- Chasing hype: Avoid investing based solely on short-term market trends or rumors. Focus on the company’s fundamentals;
- Overlooking diversification: While AI penny stocks may offer high potential returns, diversify your portfolio to spread risk across different sectors and asset classes.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
FAQs about artificial intelligence penny stocks
Are AI penny stocks suitable for beginners?
While the potential for high returns exists, AI penny stocks can be riskier and may not be suitable for beginners. It’s essential to thoroughly research and understand the associated risks.
What are the best artificial intelligence penny stocks to buy in 2024?
In 2024, you should consider investing in Pagaya Technologies (NASDAQ: PGY), Himax Technologies, Inc. (NASDAQ: HIMX), and Canaan Inc. (NASDAQ: CAN).
How can I stay informed about my AI penny stock investments?
Regularly monitor company news, financial reports, and industry trends. Utilize reliable financial news sources and consider setting up alerts for significant developments.
What is the typical holding period for AI penny stocks?
The holding period varies, but investors should prepare for both short-term volatility and the possibility of holding stocks for an extended period to realize potential gains.
