Some investors are all-in on the AI hype. These small-cap AI stocks are getting noticed.
Artificial Intelligence tools have taken the internet by storm since the launch of OpenAI’s AI-powered chatbot ChatGPT in November last year. AI is quickly becoming an essential tool for businesses, as many are using it to analyze data, streamline operations, and optimize their customer experiences, among other things.
The surging demand for AI tools has also benefited some companies. For one, Nvidia (NASDAQ:NVDA), whose chips are essential to creating AI language-generating tools like ChatGPT, has seen its stock skyrocket over the past couple of weeks.
While Nvidia’s incredible surge might be over—or might not—there likely remain opportunities for investors to benefit from the rise of AI. One opportunity presents itself in the form of small-cap AI stocks, which have the potential for significant growth—as well as higher risks—compared to other established companies.
In this article, we will take a closer look at three small-cap stocks in the AI sector that are worth checking out. These stocks have demonstrated strong financials and are well-positioned to benefit from the AI boom.
1. Remark Holdings
Remark Holdings (NASDAQ:MARK) is a technology-focused company that primarily operates in the artificial intelligence (AI) and blockchain industries. Its products and services include facial and object recognition technology, AI-powered chatbots, blockchain-based financial services, and data analysis tools.
The company is headquartered in Las Vegas, Nevada, and has a strong presence in China, where it conducts much of its business. It also maintains a digital media house, which provides marketing services. The company enjoys exclusive marketing partnerships with some of its clients due to its competitive edge with AI.
Shares of Remark are yet to fully benefit from the AI boom, as they are up only 10.00% YTD. The company’s stock, trading at around $1.21 per share, is down 73.67% over the past year.
Nevertheless, with a market cap of just $18.5 million, 14.3 million outstanding shares, and a public float of just 13.09 million shares, Remark is a micro-cap AI stock worth keeping an eye on.
2. BigBear.ai Holdings
BigBearai Holdings (NYSE:BBAI) is a technology company that specializes in the development and integration of artificial intelligence (AI) and machine learning (ML) solutions for various government and commercial clients. The company provides advanced analytics tools and platforms that integrate data from various sources to generate actionable insights for clients.
BigBear.ai Holdings’ solutions are used in areas such as situational awareness, predictive analytics, and decision support. The company is headquartered in Virginia, USA, and it provides solutions for clients across various industries, including defense, intelligence, and financial services.
Shares of BigBear.ai, currently trading at around $2.07 per share, are up an impressive 207% YTD. However, the company’s stock is still down by almost 60% over the past year.
Moreover, BigBear.ai has a market cap of $295.78 million and a public float of 36.31 million shares, with 142 million shares outstanding. Similar to Remark, BigBear.ai is also a speculative small-cap AI stock with some potential for growth.
3. Innodata
Innodata (NASDAQ:INOD) is a technology-focused company that specializes in providing AI and data-related services to clients across various industries. The company’s services include data annotation and labeling, content moderation, data cleaning and enrichment, and document digitization.
Innodata’s solutions leverage cutting-edge AI and machine learning algorithms to automate repetitive and time-consuming data-related tasks, allowing clients to focus on their core business objectives. The company serves customers across a range of industries, including financial services, healthcare, and technology. Innodata is headquartered in New Jersey, USA, and also has offices in Asia and Europe.
Innodata has also been among those that benefitted from the AI boom so far this year, with its shares up 271% YTD. The company has a market cap of $304 million and a public float of 25.09 million shares, with 27 million shares outstanding.
Conclusion
Nvidia’s run has been impressive, but a few smaller companies could eventually catch up. These smaller-cap stocks aren’t the most common stocks on the majority of apps for stock trading out there, but they do have some potential worth looking into further.
It should be noted, however, that with small-cap stocks, ‘potential’ also means ‘risk’. Be sure to conduct further research into these particular stocks – which are worth keeping an eye on.
Disclaimer: At the time of writing, the author held none of the securities mentioned in this article. Information shared in this article is for informational purposes only; nothing here is investment advice. Investing is risky. It is recommended to always consult with a licensed financial advisor before making any investments.
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