In our increasingly digital world, where technology continually transforms the landscape, investors seeking promising opportunities often turn their gaze toward the tech sector. Among the many technological innovations reshaping industries and markets, Artificial Intelligence (AI) has emerged as a dominant force with the potential to yield substantial returns. This article dives into AI stocks under $5 which offer investors the opportunity to gain significant upside potential.
The Perpetual Rise of AI: An Overview
Artificial Intelligence has rapidly evolved from a concept in science fiction to a tangible force shaping our daily lives. Over the years, AI has found applications in diverse fields. These include interactive chatbots and autonomous vehicles robotics, warehousing, and even content creation. It is evident that AI’s presence is enduring and bringing transformative changes across various industries.
AI’s broad spectrum of applications and its potential to revolutionize traditional business processes make it an attractive investment proposition. With these AI stocks under $5, investors can gain exposure to a sector that is set to redefine the future.
BigBear.ai Holdings (BBAI:NYE):
One of the best AI stocks under $5 to invest in is BigBear.ai Holdings. (BBAI:NYE) is a company that specializes in AI and machine learning to automate decision-making processes. BigBear.ai’s solutions cater to enterprise customers across multiple sectors. Government and defense, manufacturing and warehouse operations, and healthcare and life sciences are all included.
Founded in 2008, BigBear.ai made its public debut through a SPAC transaction with GigCapital4 in December 2021. Since then, BBAI stock shares have seen fluctuations, dropping from over $9 per share to below $5.
BBAI Stock Analysis:
Despite the stock’s price volatility, BigBear.ai reported impressive quarterly results for 2Q23 on August 8th. Additionally, a quarterly revenue of $38.5 million was generated. While this figure was slightly below expectations, it marked a 2.2% year-over-year increase. Notably, BigBear.ai showed resilience in narrowing its net loss to 12 cents per share, improving significantly from the 45-cent net loss reported for 2Q22.
Of particular interest to investors is BigBear.ai’s work backlog, which stood at a substantial $206 Million at the end of Q2. This 5% increase from the end of 1Q23 signifies a robust demand for the company’s AI-powered decision intelligence solutions.
BBAI Stock Forecast: Analyst Insights
BBAI stock has a USD 4.25 average analyst price target that implies an impressive potential gain of approximately 147.09% within the next year. The current price of BBAI stock is USD 1.72. Furthermore, (BBAI:NYE) has a low market CAP of USD 0.27 Billion. The stock is highly volatile and overpriced as compared to its peers. The analyst consensus rating on BBAI stock is “Strong Buy” while viewing it as very bearish.
BBAI Stock Potential: Analyst’s Rating
H.C. Wainwright analyst Scott Buck recognizes BigBear.ai’s potential as he initiates coverage on the stock and rates it as Buy with the price of USD 4. He stated, “With an existing backlog exceeding $206.0 Million, a customer base comprised of recognized commercial and government entities, we believe BigBear.ai is positioned to be a leader in the growing field of AI-driven data analytics.” Buck recommends investors consider accumulating BBAI stock shares in anticipation of accelerated revenue growth in 2024.
AudioEye Inc. (AEYE:NSD):
AudioEye Inc. (AEYE:NSD) is another AI stock under $5 that merits attention. The company specializes in providing a top-rated digital accessibility platform designed to bring websites into compliance with the Americans with Disabilities Act (ADA) and the WCAG standards. AudioEye’s platform offers a suite of accessibility tools, including alternative text, closed captioning, content organization, keyboard input, subtitling, and warnings.
Enabling Digital Accessibility with AI:
From the perspective of users, AudioEye’s products are user-friendly and comprehensive, addressing various aspects of web accessibility. Furthermore, the platform simplifies issue identification and resolution and aids in navigating the landscape of legal compliance requirements. Lastly, it facilitates the monitoring and maintenance of accessibility add-ons.
Importantly, AudioEye’s platform achieves these outcomes without requiring fundamental alterations to the website owner’s architecture or source code.
Moreover, the core of the Digital Accessibility platform of (AEYE:NSD) is its patented AI technology. It provides the foundation for a highly automated software system. The platform operates independently, offering active monitoring, automated fixes, and detailed reports. As a result, it provides industry-leading legal protection, with users of AudioEye’s platform being 67% less likely to face valid accessibility-related lawsuits, according to a recent survey.
AEYE Stock Analysis:
In its most recent financial report for 2Q23, AudioEye reported revenue of $7.84 Million, a company record. This figure exceeded the year-ago revenue by 3.5% and was nearly in line with expectations. (AEYE:NSD) reported an expected loss of 2 cents per share at the bottom line.
AEYE Stock Forecast: Analyst Insights
As per the rating of three analysts, the average analyst price target of AEYE stock is USD 9.33. This reflects a substantial potential upside of approximately 101.15% over the coming year from the current price of USD 4.64. (AEYE:NSD) has a low market CAP of USD 0.05 Billion.
The stock is overpriced as compared to its peers. Moreover, it is high in volatility. However, it had superior revenue growth in the past 5 years. It has also offered a positive cash flow in the recent four quarters. The analysts’ consensus views the stock as slightly bearish and rates it as a “Strong Buy”.
AEYE Stock Potential: Analyst’s Rating
The analyst at B. Riley Financial maintains a Buy rating on the stock and decreases the price target from USD 9 to USD 8.
Scott Buck, in his assessment of H.C. Wainwright, anticipates a promising future for AudioEye. He reiterates his Buy rating on AEYE stock with a price target of USD 10. He notes that the company possesses a strong pipeline of work and is well-positioned to capitalize on new accessibility regulations from the Department of Justice. Buck expects meaningful revenue growth beginning in 4Q23 and continuing through 2024.
Navigating AI Stocks Under $5 for Growth
As we navigate the digital landscape, AI stocks under $5 emerge as compelling investment opportunities. Companies like BigBear.ai Holdings (BBAI:NYE) and AudioEye Inc. (AEYE:NSD) offer investors the chance to participate in the AI revolution without breaking the bank.
While short-term market conditions may present challenges, these companies’ innovative AI-driven solutions, strong customer bases, and promising work backlogs position them for long-term success.
The Takeaway:
In conclusion, investors seeking to ride the wave of AI’s transformative potential can explore these AI stocks under $5 while keeping an eye on their remarkable growth prospects. As technology continues to shape our world, opportunities in the AI sector are poised to grow. Hence, making these affordable AI stocks an attractive choice for the future.
