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10 Top AI and Quantum Computing Penny Stocks for Dec. 2024

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Written by Timothy Sykes
Reviewed by Jack Kellogg Fact-checked by Ellis Hobbs
Updated 12/6/2024 33 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 December — rated on chart pattern, price action history, and news — include the following:

Stock TickerCompanyPerformance (YTD)
NASDAQ: QUBTQuantum Computing Inc+ 686.52%
NASDAQ: QMCOQuantum Corp+ 101.48%
NYSE: QBTSD-Wave Quantum Inc+ 274.39%
NASDAQ: RGTIRigetti Computing Inc+ 244.02%
NYSE: IONQIONQ Inc+ 174.10%
NASDAQ: RCATRed Cat Holdings Inc+ 875.71%
NASDAQ: PDYNPalladyne AI Corp+ 597.01%
NASDAQ: SPAISafe Pro Group Inc+ 5.85%
NASDAQ: SOUNSoundHound AI Inc+ 380.31%
NASDAQ: CRNCCerence Inc- 62.76%

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!

10 Best AI Stocks for December 2024

My top AI penny stock picks are:

  • NASDAQ: QUBT — Quantum Computing Inc — The New Order News Quantum Computing Penny Stock
  • NASDAQ: QMCO — Quantum Corp — The 600% Spiker Quantum Computing Stock
  • NYSE: QBTS — D-Wave Quantum Inc — Another Damn Quantum Computing Penny Stock!
  • NASDAQ: RGTI — Rigetti Computing Inc — The Offering News Quantum Computing Stock
  • NYSE: IONQ — IONQ Inc — The Quantum Computing Stock I Traded at the Start of its Run
  • NASDAQ: RCAT — Red Cat Holdings Inc — The Drone Penny Stock With the AI Partnership
  • NASDAQ: PDYN — Palladyne AI Corp — The Robotics Penny Stock With the Drone Partnership
  • NASDAQ: SPAI — Safe Pro Group Inc — The Other Drone Penny Stock
  • NASDAQ: SOUN — SoundHound AI Inc — The Record Revenue AI Penny Stock
  • NASDAQ: CRNC — Cerence Inc — The Automobile 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 SoundHound AI Inc (NASDAQ: SOUN), Red Cat Holdings Inc (NASDAQ: RCAT), and Cerence Inc (NASDAQ: CRNC).

  • 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. Quantum Computing Inc (NASDAQ: QUBT) — The New Order News Quantum Computing Penny Stock

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My first AI penny stock pick is Quantum Computing Inc (NASDAQ: QUBT).

This stock exploded after the company announced, on November 13, that it secured its first order from its TFLN photonic chip foundry.

Since then, the stock spiked 560%* over multiple days. Take a look, every candle represents one trading day:

QUBT chart multi-day, 1-minute candles Source: StocksToTrade

Why I Like It

We’ve already seen a lot of good volatility from this stock. And the price is still up …

There’s no telling where the price goes from here.

A 560%* spike is pretty substantial, but we’ve also seen stocks spike a lot higher in our niche.

Either way, we can expect more volatility from this stock. And where there’s volatility, there’s an opportunity to profit!

I’m on high alert for a panic dip buy opportunity right now in case the price falls lower.

Type in the ticker and use my AI trading bot to find the best setup.

2. Quantum Corp (NASDAQ: QMCO) — The 600% Spiker Quantum Computing Stock

My second AI penny stock pick is Quantum Corp (NASDAQ: QMCO).

On November 20 during premarket hours, this company announced their new product: DXi9000 to help protect customers from cyber attacks.

AI is great for a lot of things. But the technology’s strengths also make it attractive for cyber criminals.

As a result, companies like Quantum Corp are tasked with thwarting a new kind of enemy. QMCO’s announcement of its DXi9000 is a perfect example of the company’s recent innovations to meet this need.

The stock spiked 1,000% higher as a direct result of the news.

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

QMCO chart multi-day, 1-minute candles Source: StocksToTrade

Why I Like It

The chart shows a failed breakout on Tuesday, November 26. But that doesn’t mean it’s over …

We can profit off of this volatility on the way down.

I mentioned the panic dip buy pattern earlier: Take a look.

Plus, StocksToTrade shows that the float is still only 4.6 million shares. That’s well below our goal of 10 million shares or fewer.

A low supply of shares helps prices spike higher when demand increases.

Keep an eye on QMCO and wait for the price action to match one of our trading patterns!

More Breaking News

3. D-Wave Quantum Inc (NYSE: QBTS) — Another Damn Quantum Computing Penny Stock!

My third AI penny stock pick is D-Wave Quantum Inc (NYSE: QBTS).

This is a quantum computing stock that’s on a multi-week run.

You could say that the spike started on November 4 when the company announced that it had regained NYSE compliance …

Then on November 6, the company announced it completed the calibration of its latest 4,400+ qubit Advantage2 processor.

Prices gapped up that day, and by November 7 the spike was well underway.

Take a look at the chart below, and notice the breakout past multi-month resistance at $2!

Every candle represents one trading day:

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

Why I Like It

This sector is CRAZY right now.

I’m watching every volatile AI penny stock because there’s always the chance for follow-up volatility. I can trade this price action using my patterns on day two, three, four, etc.

For example … QBTS followed my weekend pattern perfectly!

I’m always looking for stocks on Friday that follow this pattern. The incoming weekend can cause an information inefficiency that causes stocks to open higher on Monday morning.

Take a look at QBTS’ chart below from Friday, November 22 to Monday, November 25. Every candle represents one trading minute:

QBTS chart multi-day, 1-minute candles Source: StocksToTrade

>> Learn My Weekend Trade Process <<

There are 52 weekends in a year … 52 opportunities to make this trade!

That’s a great way to pace yourself as a trader.

4. Rigetti Computing Inc (NASDAQ: RGTI) — The Offering News Quantum Computing Stock

My fourth AI penny stock pick is Rigetti Computing Inc (NASDAQ: RGTI).

This quantum computing stock was already gaining stream before the recent offering news.

In the month from mid-October to mid-November, the price spiked 130%*.

And on November 25 during premarket, the company surged 90% to new all-time highs after announcing it raised $100 million by selling 50 million shares to two institutional investors at $2.00 per share.

Normally an offering would dilute the stock and cause prices to drop. But in this case, two investors are purchasing all $100 million worth of stock. It’s a vote of confidence and bullish catalyst for RGTI.

Take a look at the multi-month chart below:

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

Why I Like It

The price is still up.

And in case you hadn’t noticed, it broke past multi-month resistance at $2, just like QBTS. That level now acts as support and could push prices higher.

Plus, there’s a company that’s half-way pumping this stock: Zacks Investment Research.

Zacks mentioned that the company’s $0.08 per-share loss for the recent quarter shows a year-over-year change of +38%.

So this crappy company is becoming less crappy, LOL. That could help fuel a follow-up spike in the future.

5. IONQ Inc (NYSE: IONQ) — The Quantum Computing Stock I Traded at the Start of its Run

My fifth AI penny stock pick is IONQ Inc (NYSE: IONQ).

This is yet another quantum computing stock that’s been spiking for weeks!

The run started on September 27 after IONQ announced a U.S. quantum contract award of $54.5 million with the U.S. Air Force.

By November 25, the stock spiked 330%*.

And I was trading it on day one! Take a look at my notes below:

Source: Profit.ly

Here’s the multi-month chart, every candle represents one trading day:

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

Why I Like It

IONQ keeps announcing bullish news to extend its run.

On November 7 the company announced a new partnership with NKT Photonics for next-gen. laser systems to power quantum computers.

On November 12 the company announced it had issued 5 new U.S. patents.

The company knows how to spike its stock … All we have to do is wait for the next bullish press release.

6. Red Cat Holdings Inc (NASDAQ: RCAT) — The Drone Penny Stock With the AI Partnership

My sixth AI penny stock pick is Red Cat Holdings Inc (NASDAQ: RCAT).

On November 20, RCAT announced a partnership with Palladyne AI to help bring its Teal Drones to market.

The stock spiked 110%* after the announcement. Take a look at the chart below, every candle represents one trading day:

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

Why I Like It

This spike already aligns with the volatility typical in penny stocks. Always remember that these spikes often reflect market hype rather than sustainable growth.

There are great opportunities to profit from RCAT but we need to approach them correctly …

My 7-Step Pennystocking Framework emphasizes caution during these moves.

These stocks can follow predictable frameworks. And that includes potential crashes.

Follow my popular patterns! Don’t gamble on this stock.

7. Palladyne AI Corp (NASDAQ: PDYN) — The Robotics Penny Stock With the Drone Partnership

My seventh AI penny stock pick is Palladyne AI Corp (NASDAQ: PDYN).

This is the stock that partnered with RCAT.

But the spike took a few more days to get going on PDYN …

Remember that the partnership news came out on November 20. Take a look at the chart below:

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

Why I Like It

PDYN already spiked 270%* since the partnership announcement.

It’s likely spiking higher than RCAT (270% compared to 110%) because it started at a cheaper price and PDYN has a lower float.

RCAT: 51 million shares in the float.

PDYN: 16 million shares in the float.

I’m watching both of these stocks because they share the same catalyst. But already the price action is very different.

Take it one trade at a time and wait for the chart to match one of our trading patterns.

Use AI to strengthen your thesis.

8. Safe Pro Group Inc (NASDAQ: SPAI) — The Other Drone Penny Stock

My eighth AI penny stock pick is Safe Pro Group Inc (NASDAQ: SPAI).

On November 19, we learned that SPAI updated its revenue outlook for the fourth quarter of 2024, expecting a 200% year-over-year increase.

On November 20, the company also announced that it was awarded a U.S. patent for AI drone-imagery technology.

And on November 21, SPAI made yet another announcement: An agreement with a U.S. Government contractor focused on U.S., European and NATO contracts.

The stock spiked 260%* as a direct result of these three catalysts.

Take a look at the chart below:

SPAI chart multi-day, 1-minute candles Source: StocksToTrade

Why I Like It

We saw three catalysts back-to-back-to-back!

StocksToTrade shows that it only has 4 million shares in the float.

And the price is still up … Consolidating between $4 and $5.

There could be another bullish press release right around the corner! And judging by the volatility we’ve already witnessed, it’s entirely possible the price spikes higher.

The stock reached $7 during premarket on November 21. That’s the breakout level!

9. SoundHound AI Inc (NASDAQ: SOUN) — The Record Revenue AI Penny Stock

My ninth AI penny stock pick is SoundHound AI Inc (NASDAQ: SOUN).

This was one of the first AI runners when ChatGPT broke the internet in early 2023.

Back then, SOUN spiked from $1 to $4.50.

Currently shares are trading above $7 … And it’s approaching 52-week highs.

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

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

Why I Like It

On November 12, SOUN reported record Q3 revenue that beat expectations.

  • EPS of -$0.04, a beat by $0.03.
  • Revenue of $25 million, a beat by $2 million.

This is an OG stock in the AI sector …

Not only is it on a bullish trajectory approaching major resistance at 52-week highs, it has Q3 financial data to back it up!

This catalyst has legs. We could see new highs on SOUN in December.

Make sure to identify major support levels to build smart positions on this stock.

10. Cerence Inc (NASDAQ: CRNC) — The Automobile AI Penny Stock

My tenth AI penny stock pick is Cerence Inc (NASDAQ: CRNC).

This is a software company that works to develop mobility solutions for drivers around the world.

AI is seeping into every business sector.

And the presence of AI in these companies is creating huge stock spikes.

Whether it’s because of actual value added or the hype surrounding AI … It doesn’t matter as long as the stock is spiking higher. We can profit off of that volatility.

CRNC is one of the low-priced stocks that actually seems to be profiting in this AI environment.

On November 21, the company announced Q4 financial results that beat estimates handily.

  • EPS of -$0.07, a beat by $0.31.
  • Revenue of $54 million, a beat by $7 million.

As a result, prices spiked 170%*. Take a look at the chart below. Every candle represents one trading day:

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

Why I Like It

Just like the previous stock on this watchlist (SOUN), CRNC shows bullish financial numbers that could contribute to a follow-up spike.

Already we’re seeing the price consolidate near the highs from November.

Set an alert in StocksToTrade and get ready for a breakout. If CRNC pushes higher with strong trading volume, there’s no telling how high it could run!

 

*Past performance does not indicate future results

What Is Artificial Intelligence?

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.

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

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.

What Makes AI Penny Stocks Unique?

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.

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 comprehensive list of tech penny stocks.

What to Look for in an Artificial Intelligence Penny Stock

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

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

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.

How to Trade AI Penny Stocks

To start trading AI penny stocks, follow these guidelines:

  1. Set up a trading account: Choose a broker that offers access to penny stocks and supports trading automation.
  2. Choose the right trading platform: Look for platforms with robust research tools, low-cost trading options, and good user reviews.
  3. 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.

AI Stocks Under $5

Here are some of my top watches for AI penny stocks priced under $5:

  • Cyngn Inc (NASDAQ: CYN)
  • Nauticus Robotics Inc (NASDAQ: KITT)
  • BigBear.ai Holdings Inc (NYSE: BBAI)
  • Microbot Medical Inc (NASDAQ: MBOT)
  • Guardforce AI Co Ltd (NASDAQ: GFAI)

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 biotech penny stock watchlist.

AI Penny Stocks Under $10

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 weekly penny stock watchlist.

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 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!

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.

What Fundamentals Should I Look for in AI Penny Stocks?

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.

*Past performance does not indicate future results


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* 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”