AI Stocks Under $10 To Watch in 2025

Are you busy selecting Artificial Intelligence (AI) stocks for your portfolio? Whilst a lot of the growth has been seen initially in the hardware sector (think Nvidia), the next phase is often software.

Often combined with Machine Learning (ML) technology, AI innovations are seizing the investment world by storm. It’s a crowded field, but the stocks of the ground-breaking companies which come good can be expected to soar.

The AI sector is very much in the same mould as the early days of tech stocks, which went on to make life-changing returns for their investors. This review considers the best artificial intelligence stocks under $10, each one having a plausible claim to be included in your portfolio.

What are AI Stocks?

AI represents the potential to replace any human thought process with a computer design that improves over time. The process mimics us, much in the same way that the brain assimilates new data and associations to innovate and create new solutions for existing challenges.

The prospects for AI are immense and the move towards using it has started. AI has already become part of everyday life. Insurance companies use the technology to filter claims, search engines use the technology to improve user experiences, and Siri and Alexa give a taste of the benefits of having a virtual assistant.

AI stocks are those of companies which are developing products and services which look to expand the potential of AI and ML. Picking the best stocks involves understanding the potential for a product but also the likelihood of it being commercially successful.

AI Stocks Under $10 We Are Watching

We are taking a look at those which are currently priced under $10. These are the ‘moonshot’ style stocks which could outperform all other stocks in your portfolio. Whilst some of these will not go according to plan, in a recent addition, one of those on our shortlist, Innodata, shot up from 2.97 at the beginning of 2023 to more than 45 at latest. This is far from the norm, but does help to balance the losses that are possible in such names

Exchanges such as the NASDAQ, which are a natural home for tech stocks, are a good starting place for those looking to buy AI stocks. It has a track record of incubating disruptive companies which are about to change the way people interact and see their share price take off.

Other exchanges, such as the New York Stock Exchange (NYSE), also hold AI stocks including one of the big ones in Palantir until recently. The key being to start with a wide-reaching analysis of stocks in the sector and filtering out the best prospects.

Veritone Inc. (VERI)

Veritone offers an AI operating system, aiWARE, which orchestrates machine learning models to transform audio, video, and other data sources into actionable intelligence. Their solutions cater to media, legal, and government sectors, enhancing content management and analysis.

In the second quarter of 2024, Veritone reported a 10.7% increase in revenue, reaching $37.1 million. The company expanded its partnership with Amazon Web Services (AWS), aiming to enhance AI and cloud innovation across multiple sectors.

Lantronix Inc. (LTRX)

Lantronix delivers secure data access and management solutions for Internet of Things (IoT) assets. Their products enable seamless connectivity and control of devices across diverse applications, including industrial automation and smart cities.

In the fiscal year ending June 30, 2024, Lantronix reported revenues of $100 million, a 12% increase from the previous year. The company attributed this growth to increased demand for its IoT connectivity solutions.

BigBear.ai Holdings Inc. (BBAI)

BigBear.ai specializes in AI-powered decision intelligence solutions for sectors including national security, supply chain management, and digital identity. The company leverages machine learning and data analytics to assist organizations in complex decision-making processes.

In the third quarter of 2023, BigBear.ai reported revenues of $35.5 million, a slight increase from the previous quarter. The company secured a $17.9 million extension on Phase 2 of a U.S. Army contract, highlighting its growing presence in defense-related AI applications.

Rekor Systems Inc. (REKR)

Rekor Systems specializes in AI-based vehicle recognition systems, offering solutions for public safety, smart cities, and transportation management. Their technology facilitates real-time data collection and analysis for improved operational efficiency.

In the second quarter of 2023, Rekor reported record revenues of $8.6 million, marking a 25% increase from the previous quarter. The company continues to solidify its position in the AI sector with consecutive quarter-over-quarter revenue growth.

D-Wave Quantum Inc. (QBTS)

D-Wave specializes in quantum computing systems, software, and services, focusing on solving complex computational problems. Their quantum solutions are utilized in various industries, including defense, finance, and manufacturing.

In the third quarter of 2024, D-Wave reported revenues of $12 million, a 30% increase from the previous quarter. The company attributed this growth to increased adoption of its quantum computing solutions across multiple sectors.

Guardforce AI Co. Ltd. (GFAI)

Guardforce AI provides integrated security solutions, including AI-driven robotics and cybersecurity services. Their offerings aim to enhance operational efficiency and security for clients across various industries.

In the first half of 2024, Guardforce AI reported revenues of $18.2 million, reflecting a 15% year-over-year increase. The growth was driven by the deployment of AI-powered robotic solutions in the hospitality and healthcare sectors.

Why AI?

Most stock valuation models derive the current price of a share from projected future earnings. When you consider the potential of the AI sector, any firm that makes a significant breakthrough can be expected to generate exponentially greater future revenue. That would lead to the stock price surging in the same way that Microsoft and Apple stock did when those firms were starting out, or more recently Nvidia, or Palantir.

Investing in AI stocks can also be a hedge against stocks in your portfolio losing value due to the technological changes which look inevitable. Even if you take small positions in AI stocks, tracking the growth of the sector can offer a sideways look at other stocks you hold.

AI is essentially a disruptive technology and there will be winners as well as losers as it becomes a larger part of the economy. Market guru Warren Buffett is one who has flagged up a need to monitor developments. Speaking to his investors, he said:

“I would certainly think they [artificial intelligence developments] would result in significantly less employment in certain areas, but that’s good for society… It may not be good for a given business.”

Source: Carrier Management

What to Know Before Investing in AI stocks

Investing in AI is made more difficult by the specialist knowledge that is needed to be able to fully understand the sector. If you haven’t got years to dedicate to studying for a Masters in robotics, then you’ll have to rely on research and analysis of third parties.

One edge retail investors do have is they may be better judges of whether a product is really needed, or just a neat idea. But getting to that stage requires a degree of trust in the opinions of experts.

Unfortunately, even some of those experts think that AI capabilities have been over-hyped. Rodney Brooks, a MIT roboticist and co-founder of iRobot, claims that Artificial General Intelligence (AGI) will not arrive until 2030. Sanguine quotes from Brooks and other AI experts speak more to the long-term nature of AI:

Rodney Brooks: “It is a fraught time understanding the true promise and dangers of AI. Most of what we read in the headlines… is, I believe, completely off the mark”.

Source: McKinsey

Yann LeCun, a professor at the Courant Institute of Mathematical Sciences at New York University (NYU): “It’s hard to explain to non-specialists that AGI is not a ‘thing’, and that most venues that have AGI in their name deal in highly speculative and theoretical issues”.

Source: McKinsey

Richard Sutton, professor of computer science of the University of Alberta: “Understanding human-level AI will be a profound scientific achievement (and economic boon) and may well happen by 2030 (25% chance), or by 2040 (50% chance)—or never (10% chance)”.

Source: McKinsey

Ignoring the opinions of Ivy-League professors would appear churlish. The one counterweight to the above comments is that while AI as a whole still faces challenges, there are proven instances of it already working in the real world.

Areas where most progress has to date been made include object recognition, language understanding, manual dexterity and, to a lesser extent, social understanding.