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.
My top AI stock picks for October — rated on chart pattern, price action history, and news — include the following:
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!
My top AI penny stock picks are:
NASDAQ: RR — Richtech Robotics Inc — The NVDA-Partnered Robotics Penny Stock
NASDAQ: DTSS — Datasea Inc. — The 5G Stock Whose New Agreements Are Paying Off
NASDAQ: MLGO — MicroAlgo Inc — The AI Penny Stock With the Nasdaq Warning
NASDAQ: POET — POET Technologies Inc. — The Optical AI Stock Partnering With Mitsubishi
NASDAQ: APLD — Applied Digital Corp — The Data Center Stock With the NVDA Deal
NASDAQ: SERV — Serve Robotics Inc — The Other NVIDIA Partnership Robotics Penny Stock
NASDAQ: AILE — iLearningEngines Inc — The Penny Stock Grinder That Jack Is Watching
OTCPK: AITX — Artificial Intelligence Tech Solutions Inc — The OTC Spiker That Jack Is Watching
NASDAQ: NUKK — Nukkleus Inc. — The Blockchain-Powered Fintech Penny Stock
NASDAQ: LASE — Laser Photonics Corporation — The AI-Enabled Laser 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.
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 Richtech Robotics Inc (NASDAQ: RR), Datasea Inc (NASDAQ: DTSS), and Applied Digital Corp (NASDAQ: APLD).
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 …
My first AI penny stock pick is Richtech Robotics Inc (NASDAQ: RR).
This stock has a huge history of spiking.
In August this year, the price ran 330%*.
The company was also teasing a new robot on X around the same time, see the post below:
All these days later, we finally get to see the robot that Richtech was using to pump its stock. See the headline below:
Imagine that thing crawling up to you with a mimosa in its claw … LOL.
Why I Like It
Regardless of how you feel about an AI bartender, this stock could show us another sizable opportunity to profit in October.
It’s a former spiker.
Past spikers can spike again.
The float is still relatively low: 12 million shares.
Anything close to/below 10 million shares is considered a low supply of shares. That helps prices spike higher when demand increases.
And the Scorpion announcement mentioned that RR is using NVIDIA Corporation (NASDAQ: NVDA) technologies to support its “cocktail and wine tasting programs”. 🍸 🍷
As you’ll see later in this watchlist, NVDA partnerships are huge catalysts for penny stocks like RR.
This is a no-brainer watchlist stock.
But when it comes to trading, the process gets a little more difficult.
Turns out, artificial intelligence can serve us drinks and it can also help us build smart trade positions!
My second AI penny stock pick is Datasea Inc. (NASDAQ: DTSS).
The AI craze started in early 2023 … We’re approaching two full years of intense price action within this sector.
And judging from the spike on DTSS, it’s not slowing down anytime soon.
On September 17, the company announced that its AI-5G contracts, signed on August 12, had already generated $9 million. The 12-month contract in total is estimated to have a worth of $30 million.
The stock spiked 50% as a direct result of the AI news, I traded DTSS three times as it shot higher.
Take a look at one of my trades below as an example:
Why I Like It
The spike didn’t last more than a day, but that’s OK. I already got what I came for.
These aren’t strategies where I hold onto shares and hope that the stock goes higher …
I see a popular pattern.
I get in.
I get out.
My students and I are trading volatile stocks in an already volatile AI sector … You never know when the price could fall apart.
Take a look at the chart of DTSS below, every candle represents one trading day:
This stock is still on my watchlist because of its ability and potential to spike again.
StocksToTrade shows that the float is only 1.7 million shares.
Wait for the next AI press release …
More Breaking News
My third AI penny stock pick is MicroAlgo Inc (NASDAQ: MLGO).
MLGO is a tech stock that develops algorithms for online advertising and the gaming industry.
Thanks to all of the AI momentum in 2024, MLGO managed a 330%* spike in less than two days during February of this year.
And that spike pales in comparison to the moves from June …
The price spiked 860%* on June 4 and 450%* between June 24 and 25.
Former spiker alert!
On September 23, the market learned of a Nasdaq warning, stating that MLGO’s share price was below the required level of $1.
Now, this sounds like a bearish catalyst.
And it is!
Why I Like It
There are two major reasons why MLGO could surge higher:
The company desperately pumps its stock or dilutes shares to increase the share price to regain Nasdaq compliance.
Or short sellers target it for the bearish delisting catalyst and it turns into a giant short squeeze.
We could also see a combination of these two catalysts.
Not everything is as it seems in the market …
Stick with me! I’ll teach you the ins and outs of this niche. The hidden booby traps and the patterns that we use to trade.
Every year I’m minting …
My fourth AI penny stock pick is POET Technologies Inc. (NASDAQ: POET).
On September 19, the market learned of a partnership between POET and Mitsubishi Electric to develop “integrated optical engine chipsets for 3.2T pluggable transceivers”. It’s described as an important aspect of optical connection for AI systems.
The price didn’t spike much that day. But by September 24, the stock reached an 80% move.
Why I Like It
The chart is showing consolidation below a solid breakout level at $5.50.
Take a look at the chart below, every candle represents one trading minute:
We like to trade stocks that can follow support and resistance. Without those levels, trading stocks would more closely resemble shooting baskets in the dark.
POET has a good catalyst in the AI industry and the chart shows us recent price action that we can use to build smart positions.
My fifth AI penny stock pick is Applied Digital Corp (NASDAQ: APLD).
On September 5, APLD started moving with news that NVDA (among other investors) bought a stake in the stock.
We’ve seen NVDA investments act as strong catalysts before …
Serve Robotics Inc. (NASDAQ: SERV)
SoundHound AI Inc. (NASDAQ: SOUN)
I’ll give more details further along in this watchlist …
NVDA is arguably still the most popular AI stock in the U.S. market. It holds a $3 trillion valuation. And it’s positioned to continue its dominance in the microchip industry.
Take a look at the 150%* spike from APLD thus far, following the NVDA-investment catalyst. Every candle represents one trading day:
Why I Like It
The stock already ran for more than two weeks. And prices just shot past the $7 resistance from June and July.
For anyone who’s worried that this play is overextended, good cautionary thought.
We’re likely to see a pullback sooner or later. My trade patterns can help us take advantage of the intraday volatility without exposing ourselves to a multi-day move.
The volatility on APLD is likely to continue. It’s just a matter of the price action wants to follow.
My sixth AI penny stock pick is Serve Robotics Inc (NASDAQ: SERV).
SERV was the NVDA-investment stock before APLD.
And before SERV … It was SoundHound AI Inc. (NASDAQ: SOUN).
Notice how these patterns can repeat in the market! That goes for the trading patterns that we use AND the pattern of stocks that could spike and why.
Nothing is a 100% guarantee in the market. But traders who position themselves correctly have a greater chance at success.
Let’s take a look at some charts … Shall we?
Below is a chart of the 350%* spike on SOUN, every candle represents one trading day:
And here’s a chart of the 920%* spike on SERV:
Why I Like It
I’m still watching both of these stocks because they have a history of spiking and they’re in the AI sector.
For each, the price is still higher than pre-NVDA-investment levels, and that means there’s always the possibility for a follow-up bounce or another spike with the help of a new catalyst.
Set some price alerts in and wait for the stock to rally.
My seventh AI penny stock pick is iLearningEngines Inc (NASDAQ: AILE).
This is a big short squeeze that’s currently trading right near the breakout level.
The price fell dramatically after the short seller, Hindenburg, contended the company’s revenue and expenses.
There are a ton of short sellers piling into this stock to try and ride it lower.
And I already mentioned that the short seller strategy is overcrowded …
Join me and my students on the long side!
Why I Like It
We can ride these short squeezes for a profit.
And one of the best traders in the game is my student . He joined in 2017, and to date, he’s pulled from the market (that includes losses).
Jack is watching AILE like a hawk, specifically for a ‘low volume breakout’.
And let me tell you … We’re really close. Take a look below, every candle represents one trading day:
If the price manages to spike above the breakout level on low volume it means that the short squeeze is experiencing bullish momentum AND there are still a lot of shorts that aren’t out yet.
That’s one of the ways that these short squeezes can turn into huge runs.
My eighth AI penny stock pick is Artificial Intelligence Tech Solutions Inc (OTCPK: AITX).
It’s got AI right there in the name!
And it’s a huge former spiker, take a look at the chart below:
This is another stock that’s on Jack’s watchlist …
It’s almost inevitable that this runner spikes again. But we can’t hold shares and hope.
The stock could collapse before it spikes. We have no way of knowing.
That’s why we’re waiting for a very specific factor …
Why I Like It
There will be future spikes on this stock … But we only want to focus on the biggest spikes, because those moves give us the greatest room for error. It helps mitigate some of the risk when we’re trading.
Here’s what Jack and I are looking for: More volume.
Take a look at the chart again and notice the volume below each of the biggest spikes, it’s a lot larger than any of the other days:
Another interesting fact about each of these spikes … The next day, the price opens higher and even pushes to new highs …
Let me remind you: Nothing is a 100% guarantee in the market.
History might not repeat … But it DOES rhyme.
My ninth AI penny stock pick is Nukkleus IncNew Delhi Investment. (NASDAQ: NUKK).
This company attempts to help customers build wealth in the Forex and Crypto sectors.
And the company’s systems specifically leverage AI to inform clients.
Why I Like It
It has a foot in the AI sector, but that’s not all.
The chart shows multiple former spikes as well as recent bullish momentum. Take a look:
Plus, StocksToTrade shows that the float is only 9.3 million shares. That’s below our goal of 10 million shares or fewer, and it points toward major volatility from this stock.
During premarket hours on September 23, the price spiked all the way to $0.45 … A 150%* move from the week before.
Pay attention to the premarket and after-market hours displayed on . Those levels are important for trading.
My tenth AI penny stock pick is Laser Photonics Corporation (NASDAQ: LASE).
This is a HUGE short squeeze that began August in the $2 range … And it spiked to $19 on Monday, September 23 …
The price action is insane, but remarkably, it’s not uncommon in our niche. Short squeezes have been crazy in 2024.
Take a look at the chart below, every candle represents one trading day:
I know what you’re thinking …
“The price is overextended, right?? There’s no way it spikes higher.”
Why I Like It
There’s no telling what could happen.
Technically, short sellers could keep trying to guess the topKanpur Investment. And they could keep blowing up.
See my post below:
LASE could spike higher. But even if the price tanks … I have a pattern that I can use to trade stocks that are in free fall. And it’s not short selling!
These volatile stocks like to follow a for profits. And within the framework, there are multiple trade patterns that we can use to trade.
Right now, LASE is in an area where it could consolidate and spike higher, or it could fall and give us a solid entry for a bounce.
*Past performance does not indicate future results
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.
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 analyticsSimla Stock. 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. .
AI penny stocks are distinct due to their involvement in cutting-edge technology and the small-cap market. These companies, often in the early stages of development, harness artificial intelligence to drive innovation in various sectors, from automation to data analysis. The market size for AI-driven companies is rapidly expanding, making these stocks particularly volatile. This volatility can lead to high returns but also poses significant risks. Understanding these characteristics is crucial for traders looking to capitalize on AI’s growth potential.
Critical factors that differentiate AI penny stocks from other tech stocks and traditional penny stocks include:
Technology adoption: AI companies are at the forefront of technological innovation, often developing unique applications of AI.
Regulatory environment: AI technology is subject to evolving regulations, which can impact company operations and stock performance.
Investment risks: High volatility and the nascent stage of many AI companies mean potential for significant gains or losses.
Market position: Many AI penny stocks are small-cap companies with limited market presence compared to established tech giants.
Innovation pace: The rapid pace of AI development can lead to swift changes in company fortunes, impacting stock prices dramatically.Udabur Wealth Management
AI stocks often experience significant price fluctuations driven by technological advancements and market adoption rates. Expanding your portfolio with tech penny stocks can further diversify your investment and capitalize on the tech sector’s growth. To explore promising tech penny stocks and gain insights into their market potential, check out this .
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:
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 .
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.
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.
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.
A penny stock that’s run in the past has a better chance of running again in the futureMumbai Investment. 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
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.
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, , and .
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. .
OTC or unlisted penny stocks fall into one of three tiers:
Pink sheet
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. .
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.
To start trading AI penny stocks, follow these guidelines:
Set up a trading account: Choose a broker that offers access to penny stocks and supports trading automation.
Choose the right trading platform: Look for platforms with robust research tools, low-cost trading options, and good user reviews.
Understand trading fees: Be aware of all costs involved, including commission, spreads, and potential hidden fees.
Trading AI penny stocks requires a strategic approach. Technical analysis can help identify price patterns and trading opportunities. Fundamental analysis is essential to understand a company’s financial health and potential for growth. Staying informed about AI industry trends is crucial, as new developments can significantly impact stock prices. Drawing on years of trading experience, I’ve seen how crucial it is to stay updated with publications and reports on AI advancements to make informed trading decisions.
Here are some of my top watches for AI penny stocks priced under $5:
When I’m building my watchlist for AI penny stocks under $5, I look at the following factors. These factors don’t all matter when you’re trading penny stocks — but the perception of them does matter.
Growth potential: The company’s AI projects and innovations. Companies focusing on emerging AI technologies and automation can offer significant upside.
Financial health: The company’s balance sheet, revenue trends, and cash flow. A stable financial base is crucial for sustaining growth and weathering market volatility.
Market position: The company’s standing in the AI sector. Strong market positioning can indicate future success.
Management team: The company’s leadership. Research the backgrounds and track records of the key executives.
Industry trends: Broader AI industry trends. These are the biggest catalysts in penny stock land.
Some of the hottest AI penny stocks are in the biotech sector. Biotech is a great trading sector due to the potential for huge catalysts driven by successful clinical trials or FDA approvals. Like AI, trading biotech stocks requires staying informed about the latest developments in the industry. To identify high-potential biotech penny stocks, check out my monthly .
Here are some AI stocks priced under $10:
Gaxos.AI Inc (NASDAQ: GXAI)
GSI Technology, Inc (NASDAQ: GSIT)
AXT Inc (NASDAQ: AXTI)
Airship AI Holdings Inc (NASDAQ: AISP)
SoundHound AI Inc (NASDAQ: SOUN)
Keeping an eye on companies involved in projects with buzz — sort of like Elon Musk’s Project Omega that we’ve been hearing about for years — can tip you off to future movements. Don’t give this hype a big position in your trading portfolios, but keep it on watch.
A robust penny stock watchlist should include a mix of stocks from various sectors to mitigate risks and capture opportunities across different markets. I don’t only watch AI stocks — I focus on any stock with strong growth potential. Regularly updating your watchlist and monitoring stock performance are crucial steps in staying ahead of the game. To see how I do it, check out my .
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 build 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!
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.
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.
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.
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.
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.
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.
Focus on low-cost, small-cap companies that show potential for high growth and innovation. Look for new ideas and technologies these companies are developing, and consider opinions and analyses from experts in the field to get a comprehensive understanding of the market. While AI penny stocks are primarily tech-focused, fluctuations in unrelated sectors, like crude oil, can still impact overall market sentiment and trading conditions.
Agra Stock