Introduction
Artificial Intelligence (AI) has become a cornerstone of modern technological advancements, disrupting industries ranging from healthcare to finance. Investors have increasingly turned their attention to AI stocks, recognizing the tremendous growth potential in this sector. However, many investors are now looking beyond the well-established giants like Microsoft and Google. They are focusing on lower float AI stocks that offer high growth potential and the opportunity for significant returns.
Low float stocks, defined as shares with relatively fewer available shares for trading, can experience sharp price movements due to limited supply. When combined with the booming AI sector, low float AI stocks present a unique opportunity for risk-tolerant investors. This blog post will explore some of the best low float AI stocks, focusing on small-cap, mid-cap, and micro-cap companies poised for growth in 2024.
What Are Low Float Stocks?
Before diving into the best AI stocks with low floats, it’s important to understand what “low float” means. The float refers to the number of a company’s shares that are available for trading by the public. Stocks with a low float typically have a float size of under 20 million shares, although this can vary depending on market capitalization.
Low float stocks tend to be more volatile because of the limited number of shares available. When demand increases, the price can skyrocket quickly due to the small supply. Conversely, any significant sell-off can result in sharp declines in stock price. For investors, the allure of low float stocks lies in this volatility, which can lead to substantial profits—but also presents risks.
In the context of AI, where technology is rapidly evolving and companies are constantly innovating, low float stocks in the AI space can offer exciting opportunities for early investors.
Why Focus on AI Stocks?
AI is more than just a buzzword—it’s a transformative technology that is impacting almost every sector of the economy. From autonomous vehicles to personalized medicine, AI is becoming integral to how businesses operate. The AI market is expected to grow exponentially in the coming years. According to a report by Grand View Research, the global AI market size is expected to reach USD 1,811.8 billion by 2030, growing at a CAGR of 37.3% from 2023 to 2030.
Investing in AI stocks allows investors to tap into this massive growth potential. However, instead of focusing solely on the established tech giants, considering low float AI stocks allows investors to get in early on companies that may become the leaders of tomorrow.
Now, let’s explore some of the best low float AI stocks in the small-cap, mid-cap, and micro-cap categories that could deliver significant returns in 2024.
Best Low Float Small-Cap AI Stocks
Small-cap stocks are typically defined as companies with a market capitalization between $300 million and $2 billion. These companies are often in the early stages of growth and may have significant upside potential, especially in the rapidly expanding AI sector.
1. BigBear.ai (NYSE: BBAI)
Market Cap: ~$412 million
Float: ~103 million shares
Industry: AI Solutions for Defense and Commercial Sectors
BigBear.ai provides AI-powered decision-making tools and predictive analytics for both the U.S. government and commercial enterprises. Their software integrates machine learning and data analytics to help organizations improve decision-making processes, reduce risks, and optimize outcomes.
Despite its relatively low market capitalization, BigBear.ai has secured several major government contracts, positioning itself as a leader in AI for defense applications. With a low float of around 103 million shares, BBAI can experience significant price movements during periods of increased investor interest. Given the company’s strong pipeline and the growing importance of AI in defense, BigBear.ai is a compelling small-cap AI stock to watch.
2. Veritone Inc. (NASDAQ: VERI)
Market Cap: ~$116 million
Float: ~36 million shares (considered low for its market cap)
Industry: AI-powered Content Management and Monetization
Veritone offers an AI operating system known as aiWARE, which allows businesses to harness the power of AI for various applications, including content creation, legal compliance, and media monetization. Their platform integrates a wide array of AI models to process and analyze unstructured data, making it easier for organizations to unlock insights from their data.
Veritone has seen growing adoption in industries like media and entertainment, where their AI tools help optimize content delivery and advertising strategies. Although Veritone has a higher float compared to some of the other stocks on this list, it is still considered low relative to its market cap. The stock has exhibited significant volatility in the past, making it a prime candidate for investors looking to capitalize on AI’s expansion into new industries.
3. C3.ai Inc. (NYSE: AI)
Market Cap: ~$3 billion
Float: ~108 million shares
Industry: Enterprise AI Software
C3.ai specializes in enterprise AI software, offering a platform that enables businesses to develop, deploy, and scale AI applications. Their software is used across industries such as energy, manufacturing, and finance, helping companies improve operational efficiency, reduce costs, and drive digital transformation.
C3.ai has established partnerships with major companies like Microsoft and Baker Hughes, which adds to its credibility in the enterprise AI space. With a low float of approximately 108 million shares and a growing customer base, C3.ai presents an attractive opportunity for investors who want exposure to the enterprise AI sector.
Best Low Float Mid-Cap AI Stocks
Mid-cap stocks have a market capitalization between $2 billion and $10 billion. These companies are generally more established than small-cap stocks but still offer significant growth potential, especially in emerging sectors like AI.
1. Upstart Holdings Inc. (NASDAQ: UPST)
Market Cap: ~$3.7 billion
Float: ~77 million shares
Industry: AI-powered Lending Platform
Upstart Holdings is a leading AI-powered lending platform that leverages machine learning to assess credit risk for personal loans. Unlike traditional credit scoring systems, Upstart’s AI models evaluate non-traditional variables, such as education and employment history, to predict a borrower’s ability to repay.
Upstart has disrupted the lending industry by providing a more accurate and fair assessment of creditworthiness, which has led to strong growth in loan originations. With a relatively low float of 77 million shares and strong demand for its services, Upstart is well-positioned to capitalize on the increasing adoption of AI in financial services.
2. SentinelOne Inc. (NYSE: S)
Market Cap: ~$8 billion
Float: ~263 million shares
Industry: AI-driven Cybersecurity
SentinelOne is an AI-driven cybersecurity company that provides endpoint protection through its AI-based Singularity platform. The company uses machine learning algorithms to detect and mitigate cyber threats in real-time, offering superior protection compared to traditional antivirus software.
As cyber threats become more sophisticated, businesses are increasingly turning to AI-powered solutions to safeguard their systems. SentinelOne has experienced rapid growth, securing major clients in various industries. With a relatively low float and strong growth prospects, SentinelOne is an attractive mid-cap AI stock in the cybersecurity space.
Best Low Float Micro-Cap AI Stocks
Micro-cap stocks have a market capitalization of under $300 million. These stocks are often more speculative but can offer explosive growth potential, especially in cutting-edge sectors like AI.
1. Lantronix Inc. (NASDAQ: LTRX)
Market Cap: ~$133 million
Float: ~30 million shares
Industry: AI-based IoT and Edge Computing Solutions
Lantronix provides AI-based solutions for the Internet of Things (IoT) and edge computing, helping businesses manage and optimize their connected devices. Their solutions are used in a wide range of industries, including automotive, healthcare, and smart cities.
As IoT adoption continues to grow, Lantronix is well-positioned to benefit from the increasing demand for AI-driven connectivity solutions. With a low float and strong growth potential, Lantronix is a high-risk, high-reward micro-cap AI stock to consider.
2. Roadzen Inc. (NASDAQ: RDZN)
Market Cap: ~$151 million
Float: ~21 million shares
Industry: AI-powered Insurtech Solutions
Roadzen Inc. is a pioneering company in the insurtech space, leveraging artificial intelligence to transform the auto insurance industry. The company uses AI-driven data analytics and digital platforms to optimize the insurance process, from underwriting to claims management. Roadzen’s technology enables insurers to offer more personalized and efficient services, improving customer satisfaction and reducing costs.
By integrating AI into the core of its operations, Roadzen is positioning itself as a leader in the future of insurtech, particularly in auto insurance. With a low float of around 21 million shares, this micro-cap AI stock offers the potential for significant growth as AI continues to disrupt the traditional insurance industry.
As the insurtech sector grows and more insurers adopt AI technologies, Roadzen could become a key player in this evolving industry, making it a micro-cap stock worth keeping an eye on.
Risks of Investing in Low Float AI Stocks
While low float AI stocks can offer substantial upside potential, they also come with higher risks compared to more established companies with larger floats. Here are some of the key risks to consider:
Volatility: Low float stocks can experience extreme price volatility, which can result in significant gains but also large losses.
Liquidity: With fewer shares available for trading, low float stocks can be less liquid, making it harder to buy or sell shares at desired prices.
Speculative Nature: Many low float AI stocks are in the early stages of growth and may not have a proven track record of profitability. This makes them more speculative and higher risk.
Investors should approach low float AI stocks with caution, considering their individual risk tolerance and investment time horizon.
Conclusion
Low float AI stocks offer unique opportunities for investors who are willing to embrace volatility in exchange for the potential of outsized returns. From small-cap companies like BigBear.ai and Veritone to micro-cap names like Remark Holdings and Predictive Oncology, there is no shortage of options for those looking to capitalize on the AI revolution.
As AI continues to reshape industries and drive innovation, these low float stocks could be poised for explosive growth in the coming years. However, it’s essential to thoroughly research each company, consider the associated risks, and maintain a diversified portfolio to mitigate potential downsides.
Investing in low float AI stocks is not for the faint of heart, but for those who are ready to embrace the volatility, the rewards can be substantial. Whether you’re focused on small, mid, or micro-cap stocks, the AI sector offers exciting opportunities for growth-oriented investors in 2024 and beyond.
by Steve Macalbry
Senior Editor,
BestGrowthStocks.Com
Disclaimer: The author of this article is not a licensed financial advisor. This article is intended for informational purposes only. It should not be considered financial or investment advice. We have not been compensated for the creation or distribution of this article and we do not hold any form of equity in the securities mentioned in this article. Always consult with a certified financial professional before making any financial decisions. Growth stocks carry a high degree of risk, and you could lose your entire investment.
