10 Top AI Penny Stocks To Watch for January 2024 (2024)

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 of 2023. However, the inherent volatility and the nascent stage of these companies necessitate thorough analysis and a sharp awareness of market trends.

10 AI Stocks To Watch

My top AI stock picks for January — 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!

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.

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.

Since too many newbies won't study the @30DayBoot or read the @completepenny or review the 1,000+ live trading/Q&A webinars archived for https://t.co/occ8wKmlgm hopefully these charts can help you learn how EVERY penny stock pump works, it's not luck, STUDY HISTORY HAAAAAAAAAARD! pic.twitter.com/DxNUCnq08k

— Timothy Sykes (@timothysykes) March 1, 2021

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

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.

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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.

10 Best AI Stocks for January 2024

My top AI penny stock picks are:

• NASDAQ: AAOI — Applied Optoelectronics Inc. — The Multi-Week Runner That I’m Waiting To Dip Buy
• NASDAQ: MLGO — MicroAlgo Inc — The Volatile Chinese AI Penny Stock
• AMEX: GNS — Genius Group Ltd — The Scammy Pump Penny Stock That Keeps Dropping AI News
• NYSE: GETR — Getaround Inc — The AI-Enabled Car Sharing Stock
• NASDAQ: ATAK — Aurora Technology Acquisition Corp — The Big Spiker With Big Short Interest
• NASDAQ: SOUN — SoundHound AI Inc — The AI Merger Penny Stock
• NASDAQ: CDIO — Cardio Diagnostics Holdings, Inc. — The AI-Powered Test Biotech Stock
• NYSE: PLTR — Palantir Technologies Inc — The AI Stock Leader That’s Gaining on Results
• NASDAQ: FCEL — FuelCell Energy Inc — The Junky EV Stock With Junky IBM Partnership News
• NASDAQ: WAVD — Wavedancer Inc — The MedTech Merger 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 Applied Optoelectronics Inc. (NASDAQ: AAOI), Palantir Technologies Inc (NYSE: PLTR), and Cardio Diagnostics Holdings, Inc. (NASDAQ: CDIO).

• 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, Apple, Microsoft, Google, and Facebook. Most analysts have rated all of these stocks as “strong buys.”

Let’s get to the picks …

1. Applied Optoelectronics Inc. (NASDAQ: AAOI) — The Multi-Week Runner That I’m Waiting To Dip Buy

My first AI penny stock pick is Applied Optoelectronics Inc. (NASDAQ: AAOI).

This is a legendary AI runner that squeezed higher with earnings news.

I’ve already had a ton of opportunities to trade this stock. And I’m well in the green at this point.

My legal team tells me I can’t share the numerical profits from AAOI in this article … It’s a new rule they made for me. Nevertheless, I continue to record all my trades.

Here’s a link to my AAOI profits.

In May 2023, this stock was trading below $2.

By December the price spiked 1,000%.

But I’m currently rooting for the price to crash. Here’s why …

Why I Like It

These big spikes don’t last forever.

The stock was trading below $2 for a reason.

Yes, it’s a semiconductor company and we’re in the middle of an AI boom coupled with a push toward EVs.

But that doesn’t mean the company is automatically worth 1,000% more than it was a few months ago. Let’s be realistic.

The price will crash down eventually. It lost 15% on December 29, which might be the start of a bigger downtrend.

Luckily — I have a trading process that helps me make money on the way up AND the way down.

Here’s a link with more information about the trading pattern.

Essentially, I’m waiting for AAOI to fall dramatically. Then I’ll buy shares above support and wait for a bounce.

The bigger the fall, the bigger the bounce.

There’s support on the multi-day chart at $16. Keep an eye on that level, and pay attention if the price continues to fall.

2. MicroAlgo Inc (NASDAQ: MLGO) — The Volatile Chinese AI Penny Stock

My second AI penny stock pick is MicroAlgo Inc (NASDAQ: MLGO).

If you thought the first stock on this list was volatile … Get ready.

MLGO has already spiked twice this year.

In September it launched 150% in less than 24 hours. Then in early December, the price erupted past those highs for a total move of 540% in less than 48 hours.

I’m also in the green while trading this AI runner. Here are my trades.

And it’s still on my watchlist in 2024.

Why I Like It

Past spikers can spike again.

You read about the two spikes earlier this year. After the first run, I had it on my watchlist just in case.

And sure enough, on December 6 it jumped again.

I’m a successful trader because I pay attention to the right stocks. And from my experience, it’s only a matter of time until MLGO spikes again.

Make sure you’re ready.

3. Genius Group Ltd (AMEX: GNS) — The Scammy Pump Penny Stock That Keeps Dropping AI News

My third AI penny stock pick is Genius Group Ltd (AMEX: GNS).

Talk about a former runner …

Between January and February of this year, the price spiked 2,100%. In August it spiked 390%.

I hope you recognize the opportunity in this niche by now.

These volatile stocks spike over and over again. All we have to do is wait.

Why I Like It

We need a catalyst if we want to trade a stock spike.

If there isn’t a reason for the run, there isn’t a reason to buy any shares.

And the strongest spikes come from runners with catalysts.

The scammiest stocks know how to play this game the best. We continually see GNS publish hyped-up AI news.

The company works in education. With a 2,100% spike, I expect this school to pump out Einsteins left and right.

But it doesn’t. And thus the stock crashes after each meteoric run. We can take advantage of that price action if we pay attention to the spike.

And just recently prices perked up again …

• On December 11 the company announced a new AI education ecosystem.
• On December 25 it updated 2023’s revenue growth to between 43–60%.

I drew support and resistance lines on the chart below to help guide your trading plan.

Ideally, the price consolidates above the $0.80 level and breaks out over $0.95.

But we need to wait for the perfect entry point, otherwise our risk levels get thrown off. Always protect the overall account and trade with a plan.

We hold live trading sessions daily to track and profit from the hottest runners. Real-time data is essential in this niche.

If the price breaks out before you read this, there will still be a chance to profit. But understand that our strategy will likely change.

There’s a science to this.

4. Getaround Inc (NYSE: GETR) — The AI-Enabled Car Sharing Stock

My fourth AI penny stock pick is Getaround Inc (NYSE: GETR).

Failed ride-sharing companies were a bit of a theme in December 2023.

We watched as Bird Global declared bankruptcy. Contract workers reported hostile work environments, unrealistic corporate standards, and an ever-present air of danger.

GETR is a car-sharing company that’s trying to boost its share prices. So far, it’s been unsuccessful.

The chart shows a 180% spike on December 15 after the company announced total revenues of $23.8 million for Q3 of 2023. But it ended the day red and slid even further after that.

Why I Like It

It’s a trashy penny stock with a history of spiking. And it’s currently struggling to meet the NYSE listing requirements of at least $1 per share.

I think we’ll see the company make more attempts to push prices higher. It’s just a matter of time.

It’s possible the chart never pushes above $1 and the company delists. That’s why I’m not holding shares.

But if it can build enough hype, there’s a chance it breaks out over the recent highs.

5. Aurora Technology Acquisition Corp (NASDAQ: ATAK) — The Big Spiker With Big Short Interest

My fifth AI penny stock pick is Aurora Technology Acquisition Corp (NASDAQ: ATAK).

Technically … This company doesn’t do anything.

It’s a shell company that awaits a private company interested in cutting corners and going public via a SPAC merger.

But the company has stated its intent to focus on businesses in …

• Tech
• AI
• Blockchain
• Quantum computing
• EVs

So basically: “We’re a company that doesn’t do anything but we specialize in the most volatile and bullish sectors of the market.”

Why I Like It

SPAC plays have been hot in the past.

It’s not a trend right now, but the history of volatility lends to the spikeability.

The main reason I like this play is because of the short-squeeze trend we see among low-priced stocks.

By now, most of the traders in this niche understand that penny stocks are crap companies. They can spike hundreds and thousands of percentage points, but the price ultimately crashes.

For new traders who feel they know the market, short selling is a common strategy.

But if there are too many short sellers in a stock, any bullish momentum could cause a domino effect of short sellers exiting their positions. They buy shares to exit, sending stock prices higher.

On November 30th, we learned the stock had a short interest totaling 7,000 shares. That’s up from the November 15 number of 5,200 shares, a 34.6% increase.

ATAK might be a ticking time bomb.

6. SoundHound AI Inc (NASDAQ: SOUN) — The AI Merger Penny Stock

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

It’s an old AI runner.

And by “old” I mean it was one of the first AI spikers a year ago. The AI sector is still new.

On December 30, 2022, the price spiked 80%.

Then it spiked 370% between January and February 2023.

It spiked again in June. A 100% move.

All these months later, it’s still on my watchlist.

Why I Like It

First of all, here’s the standard disclaimer: past spikers can spike again.

There’s been recent news as well. On December 7, SOUN announced its intent to acquire and merge with SYNQ3 Restaurant Solutions. The transaction is reportedly valued at around $25 million.

SOUN creates AI solutions for restaurant chains, in case you were wondering about the connection between the two.

Mergers and acquisitions will theoretically always make a business more valuable. Both companies together should be worth more than either alone. The deal is set to go down in the first quarter of 2024.

This is important: We don’t buy with speculation. No one knows whether the stock will spike.

Oftentimes we see a price spike as a stock approaches key times, like a merger that everyone knows about.

But we mustn’t overstay our welcome. Sometimes the news drops and everyone who would have bought already did. Then the price tanks.

• Recognize the bullish momentum.
• Get in with a plan.
• Follow the plan and get out.

Just make sure you’re using the right trade plan …

7. Cardio Diagnostics Holdings, Inc. (NASDAQ: CDIO) — The AI-Powered Test Biotech Stock

My seventh AI penny stock pick is Cardio Diagnostics Holdings, Inc. (NASDAQ: CDIO).

In February and March, CDIO had spikes of 250% and 680% respectively.

It stayed on my watchlist after moves like that.

And sure enough, in November the price launched 1,000%.

Why I Like It

The chart shows obvious signs of support and resistance.

And the price is still trading near the highs. The consolidation is a hint the price could break out.

Plus, there are more bullish factors at play: The AI sector is one of the hottest in the market. Hence this watchlist.

But among small-cap stocks, there’s an equally bullish sector that rivals AI.

Biotech stocks have been hot ALL YEAR.

CDIO’s spike on October 31 was a result of the company’s announcement of a new contract for its AI heart disease tests … It’s in the biotech sector AND the AI sector.

In December prices bounced off the $1 level and the company announced it had regained Nasdaq minimum listing requirements

And it’s still trying to push prices higher.

On December 19 it announced its work is to be published by the American Heart Association.

They’re begging for attention. And if they send out the right press release, they might get it.

8. Palantir Technologies Inc (NYSE: PLTR) — The AI Stock Leader That’s Gaining on Results

My eighth AI penny stock pick is Palantir Technologies Inc (NYSE: PLTR).

A lot of the AI penny stocks from earlier in 2023 are now trading above the $5 level.

That’s the true strength of this niche.

There are penny stocks still running with AI momentum and we’re closing in on a full year of this sector. PLTR is a perfect example of this trend.

In 2023 the price spiked 250%. And it’s still trading near its highs.

Why I Like It

In late November the company announced it secured 80 new deals in the third quarter of 2023. Each deal is valued at $1 million or more.

The price spiked up to $22 in December. That’s where the new breakout level is. And prices may push even further.

Make sure to build a position above key support. There’s no such thing as a 100% guaranteed trade. Trade plans help us protect our positions.

If you have enough discipline to follow the rules, your account will stay safe.

9. FuelCell Energy Inc (NASDAQ: FCEL) — The Junky EV Stock With Junky IBM Partnership News

My ninth AI penny stock pick is FuelCell Energy Inc (NASDAQ: FCEL).

Between 2020 and 2021, the price spiked 1,300%.

And there were opportunities before that too! I’m green on this stock and I have trades all the way back to 2010.

Here’s the link to my trades on FCEL.

Why I Like It

On November 28, the company announced, along with IBM, that it would begin using AI to explore fuel cell systems with longer life expectancy.

It’s a junky press release because it doesn’t show any value added. It just mentions the beginning of a partnership. It’s all speculation thus far.

And yet, since the announcement prices have spiked 60%.

What comes next could be huge!

If the stock announces a breakthrough using AI to improve fuel cells, I’d expect a follow-up spike.

And the fact that it’s working with a big company like IBM adds potential momentum.

10. Wavedancer Inc (NASDAQ: WAVD) — The MedTech Merger AI Penny Stock

My tenth AI penny stock pick is Wavedancer Inc (NASDAQ: WAVD).

On November 16, WAVD announced it would merge with Firefly Neuroscience, Inc.

The resulting company is working to create a commercial-stage AI-enabled medical technology company.

As I mentioned earlier, the biotech sector is almost as hot as the AI sector. WAVD has a foot in both camps.

After the merger news went public, the price spiked 220%. But ultimately, prices fell back to early November’s levels.

Why I Like It

My trading software shows the float is only 1.5 million shares.

Stocks with a low float are more likely to spike because the supply is constricted.

Anything below 10 million shares is considered a low float. And WAVD is on the low end of low-float stocks.

This is a low-float time bomb that does business in the two hottest sectors of the market.

Past spikers can spike again.

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.