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10 Top AI Penny Stocks To Watch for May 2024

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Written by Timothy Sykes
Reviewed by Friedrich Odermann Fact-checked by Ed Weinberg
Updated 5/8/2024 35 min read

 

Artificial intelligence (AI) penny stocks trade below $5, and are known for their high risk and potential high reward. These stocks generally belong to smaller companies at the forefront of integrating AI into diverse products and services. For traders, these stocks present a chance to take advantage of the hottest sector right now. However, the inherent volatility and the nascent stage of these companies necessitate thorough analysis and a sharp awareness of market trends.

Table of Contents

10 AI Stocks To Watch

My top AI stock picks for May — rated on chart pattern, price action history, and news — include the following:

Stock TickerCompanyPerformance (YTD)
NASDAQ: PRZOParazero Technologies Ltd- 8.41%
NASDAQ: WISAWiSA Technologies- 68.88%
NASDAQ: HOLOMicroCloud Hologram Inc- 31.01%
NASDAQ: RENTRent the Runway+ 3.72%
NASDAQ: SMCISuper Micro Computer Inc+ 202.15%
NASDAQ: YYAIConnexa Sports Technologies Inc+ 273.55%
NASDAQ: ONFOOnfolio Holdings Inc+ 0.37%
NASDAQ: SPRCSciSparc Ltd- 72.89%
NASDAQ: AUUDAuddia Inc- 74.97%
NASDAQ: BMRBeamr Imaging Ltd+ 211.67%

The penny stocks on this list are some of the wildest movers on the market …

Trading any of these stocks should be approached with a clear strategy and an understanding of the risks involved. I don’t trade until I see a setup I like.

Jump ahead to get to my trading plans for these top AI stocks!

What is Artificial Intelligence?

timothy sykes in matera in 2022
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Artificial intelligence is when a computer simulates human intelligence. Artificial intelligence technology seeks to create machines that can fill roles traditionally carried out by people.

There’s a wide range of things you can accomplish with AI. Recent artificial intelligence products include chatbots, self-driving cars, industrial robotic solutions, and smart assistants. While we might still be very far from truly smart robots like the Star Wars droids or the Transformers, we’re closer than we’ve ever been before.

What Are AI Penny Stocks?

AI penny stocks are shares of small artificial intelligence companies that trade at a low price, often under $5. These stocks are part of an industry that’s booming with potential, from machine learning to data analytics. Just because they’re cheap doesn’t mean they’re a sure bet. I’ve been trading and teaching for years, and I can tell you that these stocks can be as volatile as a shaken soda can.

The allure of AI penny stocks lies in their growth potential. Companies in this sector are often in the early stages of development, focusing on applications like chatbots, security, and advertising. Investors are drawn to the high-reward prospects, but it’s crucial to understand the risks involved. You’re not just investing money; you’re investing in a business’s potential to revolutionize industries.

AI isn’t the only hot sector out there. Another sector that’s making headlines is green energy. Check out these 7 green energy penny stocks that are worth watching.

Advantages of Trading AI Stocks

One of the greatest advantages of trading artificial intelligence stocks is their newsworthiness. In 2022 alone, we’ve heard of AI possibly becoming sentient, AI-generated art sold on NFT platforms like Crypto.com, and AI-assisted voice cloning.

Penny stocks are capitalizing on this buzz and getting the market’s inexhaustible supply of newbies excited about their own AI technologies — which will likely never materialize.

As a smart trader, you don’t have to believe all the hype surrounding the artificial intelligence space. I never buy into the hype — I just trade on it.

There’s great risk in trading. A 2019 study called “Day Trading for a Living?” looked at the success rates of Brazilian traders over a 2-year window, and found that 97% of traders with more than 300 days actively trading lost money. Only 1.1% earned more than the Brazilian minimum wage ($16 per day).

I want you to watch these stocks, but only trade them with a plan. If you go for small gains and cut your losses quickly, you can do quite well.

Apply for my Trading Challenge today and learn how to trade artificial intelligence stocks!

What to Look for in an Artificial Intelligence Penny Stock

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Like with any stock, the best way to prepare for artificial intelligence penny stock rallies is to build a watchlist. A good watchlist will build up your knowledge about specific stocks, as well as keep you prepared for the opportunities that may come.

Don’t take your penny stock lists from other people’s picks — not even mine. Other traders have different priorities, goals, and risk appetites. Here’s what to look for in a penny stock when building your watchlist:

Exhibits a Tradeable Pattern on its Stock Chart

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Get my weekly watchlist, free

Sign up to jump start your trading education!

Start with the chart.

The stocks that make my watchlists have a record of tradeable chart patterns. Check out the charts in the previous section. Penny stocks follow a boom-and-bust cycle. Since they’re mostly stocks in worthless companies that are temporarily inflated by lying promoters and gullible newbies, their patterns often repeat.

If you want to get the best read on their charts, you need a powerful trading platform on your side like StocksToTrade.

I helped design StocksToTrade. So it makes sense that it has all the features traders like me want in a trading platform.

No more navigating clunky software or hopping between multiple windows to check on the news — StocksToTrade has everything you need!

StocksToTrade has changed the way I trade. Sign up for a 14-day trial today and see how it can change your trading — it’s only $7!

Is a Low-Float Stock

Any stock with less than 10 million shares publicly available for trading is considered a low-float stock. A smaller number of shares in play means that volume spikes can really move a stock’s price.

Exhibits an Unusual Trading Volume

Stocks trading at unusual volumes are more prone to price swings, which increase your chances of safely trading “the meat of the move.” Penny stock volume is important for another reason — high volume stocks are more liquid and easier to sell.

Is a Former Runner

A penny stock that’s run in the past has a better chance of running again in the future. Why?

  • It’s shown that it can run in reaction to the catalyst that made it run the first time
  • The market has a memory
  • Promoters also have a memory, and they’ll keep on pumping a hot stock until the worthless company it’s associated with goes out of business

Gets Frequent Media Attention

Breaking news stories and press releases about new technology solutions often lead to major price swings in tech penny stocks. Like we’ve already established, AI is a sector that gets a lot of news coverage.

Where to Buy AI Penny Stocks

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You can buy AI penny stocks on major exchanges like the New York Stock Exchange (NYSE) and Nasdaq, as well as in the over-the-counter (OTC) markets. Most people trade penny stocks through broker websites and apps like Robinhood, Chase, and Wealthsimple Trade.

NYSE/Nasdaq Penny Stocks

You can find AI penny stocks among the tech giants listed on major exchanges like NYSE and Nasdaq. Listed stocks are more regulated than OTC stocks, and are generally perceived as more stable companies.

Most of the hot AI stocks are found on the Nasdaq. These stocks are generally more regulated and can offer a different kind of stability in the volatile world of penny stocks. Learn more about penny stocks on Nasdaq here.

OTC Penny Stocks

OTC or unlisted penny stocks fall into one of three tiers:

  • Pink sheet
  • OTCQB
  • OTCQX

Each OTC tier has different regulations and requirements. Pink sheets have little in the way of regulation, while OTCQX is more strictly regulated. That isn’t to say I won’t trade a pink sheet stock — I just won’t trust it.

Some AI stocks with the biggest potential for quick gains are found on the pink sheets. Of these, stocks under 10 cents are a distinct breed. These ultra-cheap stocks can be even more volatile, offering both higher risks and potentially higher rewards. If you’re looking to add some spice to your trading strategy, consider these options. Here’s a guide to penny stocks under 10 cents.

The Best Place to Buy Tech Penny Stocks

Are listed stocks better than unlisted, or vice versa? It depends on your risk appetite.

I trade both listed and unlisted stocks. I don’t see why I should limit myself.

10 Best AI Stocks for May 2024

My top AI penny stock picks are:

  • NASDAQ: PRZO — Parazero Technologies Ltd — My 40% Birthday Drone Safety Penny Stock Winner
  • NASDAQ: WISA — WiSA Technologies — The Wireless Sound Penny Stock With Partnership News
  • NASDAQ: HOLO — MicroCloud Hologram Inc — The Meme Stock With an AI Pump in its Past
  • NASDAQ: RENT — Rent the Runway — The AI-Powered Fashion Stock
  • NASDAQ: SMCI — Super Micro Computer Inc — The Volatile Mega-Cap Stock That’s Set For Earnings
  • NASDAQ: YYAI — Connexa Sports Technologies Inc — The Crappy Penny Stock That Just Changed Its Symbol
  • NASDAQ: ONFO — Onfolio Holdings Inc — The Holding Company With an AI Pump in Its Past
  • NASDAQ: SPRC — SciSparc Ltd — The AI Biotech Penny Stock
  • NASDAQ: AUUD — Auddia Inc — The Reverse Split AI Audio Stock
  • NASDAQ: BMR — Beamr Imaging Ltd — The NVIDIA Catalyst AI Penny Stock

Before you send in your orders, take note: I have NO plans to trade these stocks unless they fit my preferred setups. This is only a watchlist.

The best traders watch more than they trade. That’s what I’m trying to model here. Pay attention to the work that goes in, not the picks that come out.

Sign up for my NO-COST weekly watchlist to get my latest picks!

Here’s some background info on the AI sector:

  • What is the most promising AI stock?

A sector leader like NVIDIA Corp (NASDAQ: NVDA) is the best bet for the most promising AI stock. But remember, we’re traders, not investors. So the stocks on this list are ones we’re watching for short-term moves, not predictions of which will lead stock exchanges in 2030.

  • What are the top 3 AI stocks to buy now?

My top 3 AI stocks to buy now (as long as their price action is strong) are WiSA Technologies (NASDAQ: WISA), Parazero Technologies Ltd (NASDAQ: PRZO), and Super Micro Computer Inc (NASDAQ: SMCI).

  • Which company is most advanced in AI?

NVIDIA is the most advanced publicly traded company in AI, that’s why it’s the sector leader. But other leading tech stocks like Apple, Microsoft, Google, and Facebook are all safe bets to pull ahead at some point.

  • Which Artificial Intelligence stocks have a “Strong Buy” analyst rating?

Analysts tend to love these tech leaders — NVIDIA, Microsoft, Google, and Facebook. Most analysts have rated all of these stocks as “strong buys.”

Let’s get to the picks …

1. Parazero Technologies Ltd (NASDAQ: PRZO) — My 40% Birthday Drone Safety Penny Stock Winner

My first AI penny stock pick is Parazero Technologies Ltd (NASDAQ: PRZO).

I bought shares of PRZO on Friday, April 12. The next Monday, my Birthday, April 15, I celebrated by selling those shares for a profit.

Unfortunately, that weekend the Middle Eastern conflict escalated, specifically between Israel and Iran. Israel had attacked an Iranian consulate early in April, and we learned of an incoming Iranian retaliatory strike the Friday of April 12.

But my experience in the stock market allowed me to take advantage of volatile price action related to the event.

There’s a chart below of the price action, every candle represents one trading day:

PRZO chart multi-month, 1-day candles Source: StocksToTrade

PRZO is an Israeli owned AI-drone company. And this isn’t the first time we’ve seen it spike.

In October 2023 — during the initial Hamas invasion of Israel, the stock spiked 460%.*

Interestingly enough, the company announced bullish news on Friday, October 6, the day before the Hamas attack. That’s why on the chart below, you can see the spike starting a day early.

Every candle represents one trading day:

PRZO chart multi-week, 1-day candles. Source: StocksToTrade

Why I Like It

The spike in October ‘23 is the reason I had the foresight to snag profits on the most recent weekend gap up. And any follow up Middle East tension could cause it to spike again.

My trade notes are below, with a starting stake of $6,565:

Source: Profit.ly

PRZO is one of the latest weekend trades that I’ve made in 2024 …

Every Friday I watch for very specific price action! Here’s the framework I followed for PRZO.

2. WiSA Technologies (NASDAQ: WISA) — The Wireless Sound Penny Stock With Partnership News

My second AI penny stock pick is WiSA Technologies (NASDAQ: WISA).

I traded this runner multiple times when it started to spike on April 16.

The company announced an additional license with a “multi-billion dollar revenue company” for its immersive audio technology. And I had eyes on it before the market opened thanks to the Breaking News alert.

Take a look at the chart below with alert details. Every candle represents one trading day:

WISA chart intraday, 1-minute candles Source: StocksToTrade

These plays CAN run for multiple days, but it pays to have eyes on them early. For example, WISA spiked higher after April 16. The total move measures 920%.*

We’re seeing runners like this every week in the 2024 market!*

Here’s where you can find the next Breaking News trade alert.

Right after the market opened on April 16 I snagged some profits — my trade notes are below.

The first was with a starting stake of $8,760:

Source: Profit.ly

I traded it again midday for another profit. With a starting stake of $15,325:

Source: Profit.ly

Why I Like It

The stock is still holding some of its gains. That’s a hint that it could push higher!

Take a look at the chart below that shows support at the $4 level, every candle represents five minutes:

WISA chart multi-day, 5-minute candles Source: StocksToTrade

Plus, StocksToTrade shows that the stock’s float is only 1.4 million shares.

Anything below 10 million shares is considered “low float” … also known as a low supply of shares. The low supply helps the share price spike higher when demand increases.

It essentially increases the volatility of the stock.

Keep an eye on this runner as it works back toward the breakout level.

3. MicroCloud Hologram Inc (NASDAQ: HOLO) — The Meme Stock With an AI Pump in its Past

My third AI penny stock pick is MicroCloud Hologram Inc (NASDAQ: HOLO).

This is one of the most legendary short squeezes of 2024 … so far.

I’ve already written multiple blog posts about this stock and filmed a handful of videos tracking the price action …

Like the one below:

 

The most exciting thing about this stock right now: Past spikers can spike again.

Why I Like It

There were HOLO spikes in January and August 2023 as well — 610%* and 350%* respectively

But unlike the most recent 2024 short squeeze, the spikes in 2023 had roots in the AI industry.

The volatility in 2024 just happened to turn HOLO into a massive squeeze. Forget the 610% and 350% 2023 spikes … in February 2024, HOLO launched 6,400%.*

It went from less than $2 to $98.

The chart below shows all of the moves since 2023. Each candle represents one trading day:

HOLO chart multi-month, 1-day candles Source: StocksToTrade

I don’t expect HOLO to run back to $98. That’s an unrealistic prediction. And besides, I don’t predict price action.

Instead, I react to it.

Here’s what I’ve noticed recently:

  • HOLO tried to spike in March.
  • It tried to spike twice in April.

I zoomed in on the daily chart below, take a look at the beat-down spike attempts:

HOLO chart, multi-week, 1-day candles Source: StocksToTrade

It’s only a matter of time until the stock tries to spike again …

4. Rent the Runway (NASDAQ: RENT) — The AI-Powered Fashion Stock

My fourth AI penny stock pick is Rent the Runway (NASDAQ: RENT).

On April 10 during after hours, RENT announced Q4 financial results for the 2023 fiscal year.

The earnings per share (EPS) missed expectations by $1.13. But the company’s revenue beat projections by $1.3 million.

That week the stock spiked 430%.* I snagged a cool profit the day after the announcement.

See my trade notes below on RENT, with a starting stake of $22,296:

Source: Profit.ly

After the spike, prices sold off. That’s to be expected in this niche. We play the short-term volatility before the prices crash.

Always remember that these are trash penny stocks. Some of the worst stocks in the market can spike hundreds and thousands of percentage points. Our goal is to identify price action that could push higher.

When I look at RENT’s chart now, we can see obvious consolidation above the $10 level. Every candle below represents five minutes:

RENT chart intraday, 5-minute candles Source: StocksToTrade

There are still quite a few bag holders from the last few weeks. Wait for the chart to show us some bullish volatility.

That’s when we’ll know it’s time to plan a trade.

StocksToTrade shows a float of only 1.9 million shares. That works in our favor!

5. Super Micro Computer Inc (NASDAQ: SMCI) — The Volatile Mega-Cap Stock That’s Set For Earnings

My fifth AI penny stock pick is Super Micro Computer Inc (NASDAQ: SMCI).

On March 5 we learned that SMCI would join the S&P 500 this year.

That’s BIG news for a mega-cap stock.

Now, we usually trade low-priced stocks because:

  • We can load up on shares.
  • The low price helps the stock spike higher from a percentage perspective.

Higher priced stocks like SMCI aren’t known to surge like volatile penny stocks.

But the AI and tech sectors are so hot in 2024, we’re seeing some INSANE moves from big stocks. SMCI and NVDA are great examples.

Right now I’m watching SMCI because the chart looks a lot like a penny stock.

And in a lot of ways, SMCI acts as a tech sector leader. We can gain insight on tech trade opportunities in our low-price niche by watching setups like SMCI.

In 2024, prices spiked 330%* despite starting the year above $250 per share.

Look at the insane move so far this year. On the chart below, every candle represents one trading day:

SMCI chart multi-month, 1-day candles Source: StocksToTrade

Why I Like It

I know that this runner is out of bounds for most small-account traders.

But … When large-cap stocks behave like volatile penny stocks, we can trade them for lower prices using options.

Now, at the mention of “options” a lot of traders shy away. But it’s not as confusing as you might think.

An option is a contract that gives you the right to buy or sell shares of a stock.

So, theoretically: If you think SMCI is going to trade higher in the future, you could buy a contract and then sell it after SMCI spikes without actually buying any shares of SMCI.

The value of the contract is what we’re trading, not the actual stock.

It’s easier said than done, but there IS a process for profits.For example, Ben Sturgill is a renowned options trader with verifiable profits. Take a look at his process.

There are so many opportunities to profit in this 2024 market.

Pick a strategy that makes sense to you and hit the ground running!

6. Connexa Sports Technologies Inc (NASDAQ: YYAI) — The Crappy Penny Stock That Just Changed Its Symbol

My sixth AI penny stock pick is Connexa Sports Technologies Inc (NASDAQ: YYAI).

This is one of the sketchier things I’ve seen in 2024 …

Always remember that these stocks are crap! We can trade them for short term profits, but we NEVER believe the hype.

YYAI is a perfect example of some shady business practices in our niche. The stock used to be called YYEM. And in the last few weeks under that ticker symbol, the price spiked 1,100%.* Then it immediately crashed 60% in one day.

The very next day, on April 22, the stock started trading under a new symbol named YYAI.

Take a look at the chart below, every candle represents one trading day:

YYAI chart multi-month, 1-day candles Source: StocksToTrade

The company mentioned the ticker switch would more appropriately reflect “the future business operation”. As a sports technologies company … lol.

So basically they wanted to put “AI” in the title. Likely to try and mooch off the overall AI market momentum.

… sketchy … 

Why I Like It

The shady market dealings are obvious.

But unfortunately, the SEC doesn’t have enough resources to check these crappy companies.

These spikes will continue to happen. The best I can do is warn you about the dangers and point out the best profit opportunities.

7. Onfolio Holdings Inc (NASDAQ: ONFO) — The Holding Company With an AI Pump in Its Past

My seventh AI penny stock pick is Onfolio Holdings Inc (NASDAQ: ONFO).

In June 2023 the company announced its intent to increase an AI business presence through acquisitions and by leveraging certain subsidiaries.

The chart didn’t spike like some of its peers in the same sector.

But I’m still watching the price action.

Why I Like It

The company obviously knows what’s hot. They tried to inflate the price with an AI press release in June of 2023. That’s only a few months after the AI craze began.

Also, StocksToTrade shows that the float is only 3.2 million shares.

ONFO is a powder keg that’s waiting for the perfect spark.

8. SciSparc Ltd. (NASDAQ: SPRC) — The AI Biotech Penny Stock

My eighth AI penny stock pick is SciSparc Ltd. (NASDAQ: SPRC).

This stock combines the two hottest sectors in the market.

  • AI
  • Biotech

It seems there’s a new batch of biotech stocks spiking every week right now.

The biotech sector has been hot in the past. It’s not a huge surprise to see these stocks spiking.

But it’s very exciting when we find stocks with a foot in two hot sectors instead of one.

Why I Like It

Besides the double sector, SPRC has an incredibly low float.

StocksToTrade shows only 259k shares.

The chart also shows a huge history of spiking in 2023. Take a look below, every candle represents one trading day:

SPRC chart multi-month, 1-day candles Source: StocksToTrade

Just like ONFO, SPRC is a powder keg.

Get ready for the next spike …

9. Auddia Inc (NASDAQ: AUUD) — The Reverse Split AI Audio Stock

My ninth AI penny stock pick is Auddia Inc (NASDAQ: AUUD).

Sketchy penny stocks hold reverse splits in an effort to prop up the share price.

The share supply is cut, thereby making every remaining share more valuable.

Penny stocks usually have to inflate their prices to meet exchange listing requirements. One of the requirements a company must follow to remain on the Nasdaq exchange is a share price above $1.

On February 23, AUUD announced a 1-for-25 reverse split set for February 27. This is clear evidence that the company will take action to prop up the price.

And it foreshadowed the spike in April.

Why I Like It

On April 4 the company announced a new patent from the U.S. Patent and Trademark Office for its AI technology.

The price spiked 290%* in one day.  The subsequent selloff was drastic, but prices are still hovering around support at $2. That’s a hint the price could push higher.

Plus, StocksToTrade shows the float is only 1.9 million shares.

Wait for the next catalyst to spike the price higher.

10. Beamr Imaging Ltd (NASDAQ: BMR) — The NVIDIA Catalyst AI Penny Stock

My tenth AI penny stock pick is Beamr Imaging Ltd (NASDAQ: BMR).

On February 12, at 7 A.M. Eastern during premarket hours, BMR announced a partnership with NVIDIA Corporation (NASDAQ: NVDA).

NVDA is arguably the most popular company in the world right now. Definitely within the tech sector.

The stock is surging to new heights as businesses scramble for NVDA microchips. The massive tech stock is smashing company value records.

Take a look at the NVDA chart below, every candle represents one trading day:

NVDA chart multi-month, 1-day candles Source: StocksToTrade

A hook up with a sector leader like NVDA is huge news for a penny stock.

BMR spiked 1,500%* in less than 24 hours after the announcement. Since then the stock has lost 70% of its value.

But there’s a possible squeeze brewing.

Why I Like It

It reminds me of another intense spiker that started running only a few days earlier on February 7. Another stock that we already covered …

MicroCloud Hologram Inc. (NASDAQ: HOLO) managed to spike 2,600%* in a similarly spectacular fashion.

The price slid lower, like BMR, but it consolidated for a few days and broke out to reach $98 per share!

HOLO was trading below $2 less than two weeks before … That’s a 6,400%* move. And BMR was trading below $3 before its recent spike …

This stock could wake up any day!

I’ve already traded it 3 times since the spike on February 12.

A starting stake of $16,575:

Source: Profit.ly

A starting stake of $16,710:

Source: Profit.ly

A starting stake of $15,696:

Source: Profit.ly

It’s not a 100% guarantee that BMR will push to new highs.

Nothing is guaranteed when it comes to the stock market.

But we know that volatile stocks can follow popular patterns. And we know that past spikers can spike again.

The next time BMR goes on a run, there are patterns that we can use to trade the price action.

AI Stocks Under $5

The allure of hot sector stocks, especially when they’re also penny stocks, is undeniable. These stocks present a unique blend of opportunity and volatility. The AI industry is booming, with advancements and applications spreading across various sectors, from healthcare to finance, making AI stocks a magnet for investors looking for the next big thing. The gains here can be proportionately greater than those from more established stocks, mainly because even minor positive news or advancements can send their prices soaring.

However, it’s crucial to approach these opportunities with a clear strategy and an understanding of the risks involved. The volatility of penny stocks, combined with the speculative nature of AI ventures, means that while the potential for rapid gains is significant, the risk of losses is equally high. Conduct thorough research, looking beyond the hype. And never invest in these stocks — only trade them.

Remember, the key to success in trading AI stocks under $5 is not just about jumping on every opportunity but being selective and strategic. It’s about leveraging the explosive potential of the AI sector while managing risk meticulously. By focusing on companies with the potential to lead in their niche, traders can capitalize on the disproportionate gains that these penny stocks offer, all while keeping their investment strategy tight and cutting losses quickly.

Key Takeaways

Trading in AI penny stocks presents potential for profit, yet it’s crucial to keep an awareness of the risks involved. As traders, our approach isn’t about blindly pouring money into AI stocks. Instead, we focus on trading based on discernible patterns and deep market insights.

In trading, the small gains accumulate over time. Don’t get swept away by the AI buzz; stay grounded in hard facts and observable market patterns. That’s the essence of trading AI penny stocks.

Key Considerations:

  • A lot of penny stocks are shady. Risk in AI penny stocks can be heightened due to limited company information and unsavory promotion.
  • There’s a possibility for big gains. With the AI sector’s potential for rapid advancement, these stocks can go supernova at any time.
  • The sector is young. AI penny stocks are impacted by technological innovations and developments, which can dramatically shift their market trajectory and valuation.

Artificial intelligence is one of the hottest sectors in trading, thanks to it being one of the hottest sectors in the popular imagination. The frequency of breaking news means there are bound to be opportunities for good trades.

Just because there are opportunities for trades doesn’t mean you will necessarily catch them. You have to be prepared. That means keeping a good watchlist, watching the market, and studying harder than all of the other traders trying to come out on top.

What are the AI penny stocks on YOUR watchlist? Let me know in the comments!

Frequently Asked Questions

How Should You Value AI Companies?

Valuing AI companies is a complex task that involves a deep dive into their financials, growth prospects, and market demand. Traditional metrics like earnings and revenue are important, but you also need to consider factors like data acquisition capabilities and the quality of their machine learning algorithms. From my experience, understanding the nuances of an AI company’s value can make or break your portfolio.

What AI Company Is Elon Musk Investing In?

Elon Musk recently launched xAI, billed as a ChatGPT alternative. Musk was a founding board member and investor in OpenAI, the company behind ChatGPT. He stepped away due to potential conflicts with Tesla’s AI development for self-driving cars.

How Do You Invest in the AI Industry?

Investing in the AI industry requires a well-thought-out strategy. You need to diversify your investments across various sectors like analytics, machine learning, and data security. You can use a mix of financial instruments like securities, equities, and even some options to balance out the risks and potential rewards.

What Information Can I Find in AI Articles?

By reading widely, you’ll find valuable information and insights related to artificial intelligence businesses and their customers. They often have content that contains various links to research and services, aimed to help you better understand this market.

What Determines the Market Cap of AI Penny Stocks?

The market cap of AI penny stocks is determined by a variety of factors including their momentum and results in the market. Monitoring these can give you an idea of their potential for profit.

How Can Services and Research Aid My Investment?

Services provide tools and platforms that can assist you in making informed decisions. The research, on the other hand, provides deeper insights into market trends, business models, and potential for profit, for stocks ranging from powerhouses like Tesla (TSLA), NVIDIA (NVDA), and Microsoft (MSFT) to penny stocks like AMST, POAI, and PBTS.

*Past performance does not indicate future results


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Timothy Sykes

Tim Sykes is a penny stock trader and teacher who became a self-made millionaire by the age of 22 by trading $12,415 of bar mitzvah money. After becoming disenchanted with the hedge fund world, he established the Tim Sykes Trading Challenge to teach aspiring traders how to follow his trading strategies. He’s been featured in a variety of media outlets including CNN, Larry King, Steve Harvey, Forbes, Men’s Journal, and more. He’s also an active philanthropist and environmental activist, a co-founder of Karmagawa, and has donated millions of dollars to charity. Read More

* Results are not typical and will vary from person to person. Making money trading stocks takes time, dedication, and hard work. There are inherent risks involved with investing in the stock market, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk. See Terms of Service here

The available research on day trading suggests that most active traders lose money. Fees and overtrading are major contributors to these losses.

A 2000 study called “Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors” evaluated 66,465 U.S. households that held stocks from 1991 to 1996. The households that traded most averaged an 11.4% annual return during a period where the overall market gained 17.9%. These lower returns were attributed to overconfidence.

A 2014 paper (revised 2019) titled “Learning Fast or Slow?” analyzed the complete transaction history of the Taiwan Stock Exchange between 1992 and 2006. It looked at the ongoing performance of day traders in this sample, and found that 97% of day traders can expect to lose money from trading, and more than 90% of all day trading volume can be traced to investors who predictably lose money. Additionally, it tied the behavior of gamblers and drivers who get more speeding tickets to overtrading, and cited studies showing that legalized gambling has an inverse effect on trading volume.

A 2019 research study (revised 2020) called “Day Trading for a Living?” observed 19,646 Brazilian futures contract traders who started day trading from 2013 to 2015, and recorded two years of their trading activity. The study authors found that 97% of traders with more than 300 days actively trading lost money, and only 1.1% earned more than the Brazilian minimum wage ($16 USD per day). They hypothesized that the greater returns shown in previous studies did not differentiate between frequent day traders and those who traded rarely, and that more frequent trading activity decreases the chance of profitability.

These studies show the wide variance of the available data on day trading profitability. One thing that seems clear from the research is that most day traders lose money .

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Citations for Disclaimer

Barber, Brad M. and Odean, Terrance, Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. Available at SSRN: “Day Trading for a Living?”

Barber, Brad M. and Lee, Yi-Tsung and Liu, Yu-Jane and Odean, Terrance and Zhang, Ke, Learning Fast or Slow? (May 28, 2019). Forthcoming: Review of Asset Pricing Studies, Available at SSRN: “https://ssrn.com/abstract=2535636”

Chague, Fernando and De-Losso, Rodrigo and Giovannetti, Bruno, Day Trading for a Living? (June 11, 2020). Available at SSRN: “https://ssrn.com/abstract=3423101”