6 Best AI Stocks to Buy Under $5 Now | Cheap AI Stocks (2024)

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Artificial intelligence is the darling of the investing set at the moment, and opportunities abound. But many of the big names in this space come with equally big stock prices. Keep reading to find out the best artificial intelligence stocks under $5.

6 Best AI Stocks Under $5

Looking to invest in AI and machine learning stocks but don’t want to spend more than $5? Here are six of the best AI stocks under $5 that are worth a look:

1. Rekor Systems Inc. (REKR)
2. Nerdy Inc. (NRDY)
3. FiscalNote Holdings Inc. (NOTE)
4. Ideanomics Inc. (IDEX)
5. BigBear.ai Holdings Inc. (BBAI)
6. Duos Technologies Group Inc. (DUOT)

1. Rekor Systems Inc.

Rekor Systems Inc. (Nasdaq: REKR) uses AI for transportation management, public safety and “roadway intelligence,” according to its website. Using AI to aggregate roadway data, Rekor collects information from over 30,000 sites and 13 million vehicles over 775 billion miles to provide data and insights that help government and commercial customers understand traffic and improve communities.

Rekor closed at $2.06 on March 15. Year to date, it’s down 38%, but it’s up almost 53% for the year. The current average analyst 12-month price target is $4.50. The company, which expects to have netted $3.5 million from a recent underwritten public offering of 1,500,000 shares of common stock, has a “strong buy” rating from analysts.

2. Nerdy Inc.

Nerdy Inc. (NYSE: NRDY) is a live online learning platform that uses AI to personalize learning of over 3,000 subjects. The company offers one-on-one, small-group and large-group learning experiences to consumers and educational institutions. There is also a self-study option that allows users to target problem areas.

Nerdy stock closed at $2.99 per share on March 15. The stock is down about 13% year to date, but analysts expect it to reach $3.25 to $6.00 per share in the next 12 months, with $4.58 being the average target. While the company ended 2023 with almost 19% revenue growth, net income was down over 13%. However, analysts still rate it a “buy.”

3. FiscalNote Holdings Inc.

FiscalNote (NYSE: NOTE) is a leading provider of AI technology, data and content that helps organizations stay ahead of political, corporate and regulatory environments, according to the company’s website. Five thousand organizations use its products and insights.

NOTE shares are up over 53% so far this year. On March 5, FiscalNote released its fourth-quarter and full-year financial results for 2023, announcing 17% year-over-year revenue growth and net losses of $51 million. However, the company’s cash grew by $15 million with the sale of Board.org, a non-core product that operated independently of FiscalNote, according to a press release.

Analysts’ average price target is $3.60, more than double the closing price of $1.75 on March 15. Their consensus recommendation is “buy.”

4. Ideanomics Inc.

Ideanomics (Nasdaq: IDEX) is a global business group that helps commercial organizations transition to electric vehicles. Its various businesses focus on charging technology and EV work trucks, tractors and high-performance motorcycles.

This is a highly speculative investment. Shares closed at $1.05 on March 15, just above their 52-week low and 94% below the 52-week high of $16.25. However, Ideanomics has landed on a couple of recommendation lists recently, and several hedge funds have acquired or increased their shares.

5. BigBear.ai Holdings Inc.

BigBear.ai Holdings (NYSE: BBAI) provides AI-powered intelligence solutions to military and commercial customers in three core markets: global supply chain and logistics, autonomous systems and cybersecurity.

BigBear.ai recently announced the successful close of its acquisition of Pangiam, a facial recognition and advanced biometrics company, in an all-stock deal. The acquisition will allow BigBear.ai to market a full-vision AI portfolio, including near-field and far-field vision AI.

On March 15, BigBear.ai Holdings closed at $2.44. The stock has had a YTD return of 14%, and the average analyst price target is $4.

BigBear.ai’s revenue grew by less than 1 percentage point in the fourth quarter of 2023. While the company is not profitable, net losses dropped by nearly 29% and Q4 was BigBear.ai’s second consecutive quarter of positive earnings before interest, taxes, depreciation and amortization, or EBITDA, which is one measure of a company’s valuation.

6. Duos Technologies Group Inc.

Duos Technologies Group Inc. (Nasdaq: DUOT) uses artificial intelligence and automation to improve the rail industry’s ability to efficiently move commerce and people. The company provides an automated Railcar Inspection Portal to streamline the inspection process, both on mainlines and in yards. The company also provides command and control software, undercarriage examination technology and more.

Duos Technologies Group stock is up nearly 50% so far this year, and it closed on March 15 at $4.33 per share. Analysts expect the stock to reach between $6.50 and $7 per share in the next 12 months, and they give Duos a “buy” rating.

Final Take

The artificial intelligence and machine learning sector is still in its early stages, and while many companies have already made a name for themselves — and have the stock prices to prove it — there will be others that will also likely see considerable growth. These companies, whose stocks are now trading below $5 per share, may be the next Nvidia five years from now. On the other hand, they could be out of business. Some investors may turn a huge profit in this sector, but there is always risk. Getting in on these positions in the early days may be a great opportunity, but be sure not to invest more than you can afford to lose.

Daria Uhlig contributed to the reporting for this article.

Data is accurate as of March 15, 2024, and is subject to change.