Okay, so I’ve been messing around with some really cheap AI stocks lately. Some of them are probably going to zero, but some… maybe not.
What Even Are These Penny AI Stocks?
We’re talking about companies trading for literal pennies, usually OTC stocks. The “AI” part? Sometimes it’s legit, sometimes it’s… optimistic. A lot of these companies used to be something totally different – like, a mining company that suddenly pivots to AI-powered dog grooming. Not kidding. The market cap on some of these are tiny. Less than my car is worth.
The thing to remember is that investing in these is super risky. You could lose everything. I’m not a financial advisor. This isn’t advice. I just like gambling with small amounts of money and telling you guys about it.
Finding the (Potentially) Less Terrible Ones
So, how do you even start sifting through the garbage? Here’s what I did, but again, this isn’t some magic formula. It’s more like educated guessing.
Step 1: Screener Time
Prerequisites: A brokerage account that lets you trade OTC stocks (a lot of the popular ones don’t). Maybe $500 you’re okay losing. Estimated time: 1-2 hours.
I used Finviz and StockRover for screening. Both have free versions that are good enough for basic stuff. I set the price filter to “Under $1” and then started adding industry keywords like “AI”, “Machine Learning”, “Data Science”, etc. You can also use stuff like “Software” or “Technology,” but you’ll get a lot of noise. Prepare to see a lot of oil and gas companies claiming they use AI to optimize drilling.
The problem is, most of these screeners aren’t great at filtering specifically for AI. You’re relying on the companies themselves to use the right keywords. So be prepared to dig.
Step 2: The Website Deep Dive
Prerequisites: A strong cup of coffee. Estimated time: Varies wildly. Could be 5 minutes, could be an hour PER STOCK.
Okay, you have a list. Now go to each company’s website. This is where the fun begins… or the despair. Look for these things:
- What do they actually do? Read the “About Us” page. Look for clear explanations of their technology. If it’s all buzzwords and no substance, run. If they make grandiose claims (“Revolutionizing the industry!”) but don’t say how, that’s a red flag.
- Who’s running the show? Check the “Management” or “Investor Relations” page. Look for people with actual experience in AI or technology. If it’s a bunch of guys who used to run a used car dealership, be skeptical. (I’m not saying used car guys are bad, but it’s a different skillset.)
- Do they have customers? Look for case studies, testimonials, or even just a list of clients. If they’re building AI for businesses, who’s using it? If it’s all theoretical, that’s not great.
- Recent news. Check the “News” or “Press Releases” section. Are they actually doing anything? Launching products? Announcing partnerships? Or is it just crickets? The “news” might be some random blog regurgitating what’s on their website.
- SEC filings. This is where it gets boring but important. Look for their 10-K and 10-Q reports (annual and quarterly). These are legally required filings that give you a more detailed look at their financials. Prepare for jargon.
What can go wrong? You’ll find a lot of dead links, broken websites, and websites that look like they were designed in 1998. This is normal. It doesn’t automatically mean the company is bad, but it doesn’t inspire confidence.
One time I found a site where half the links went to a competitor. Another time the website was the SEC filing. I’m not kidding.
Step 3: Financials: The Numbers Game (Sort Of)
Prerequisites: Basic accounting knowledge (or the ability to Google accounting terms). Estimated time: 30 minutes per stock if you know what you’re doing. An hour if you don’t.
Look, I’m not Warren Buffett. I can barely balance my checkbook. But here are a few key things I look for in those SEC filings:
- Revenue. Are they actually making money? How much? Is it growing? If they have zero revenue, that’s a huge risk. If they have some revenue but it’s declining, that’s also bad.
- Net income (or loss). Are they profitable? Most of these companies aren’t. But if they’re losing a lot of money, that’s a problem. Look for a trend – are they losing less money each year, or more?
- Cash flow. This is how much cash they’re generating from their operations. It’s a more accurate picture of their financial health than net income, because it’s harder to manipulate. If they’re burning through cash, they’ll eventually need to raise more money, which can dilute existing shareholders (meaning your shares become worth less).
- Debt. How much debt do they have? A lot of debt can be a death sentence for a small company.
- Share dilution. How much have they been issuing new shares? Watch out for big jumps in outstanding shares – that means your slice of the pie is getting smaller.
I know, this sounds boring. But it’s important. You don’t need to be an expert, but you should at least be able to understand the basics. There are tons of free resources online that can help you learn about financial statements.
One thing that annoys me: Some of these companies make it really hard to find their financials. They bury them on their website, or they don’t even have them at all. That’s a huge red flag. If they’re not transparent about their finances, what else are they hiding?
A Few Names I’ve Been Looking At (Don’t Take This As A Recommendation)
Okay, so after doing all that digging, here are a few ai stocks under $1 that I’ve been watching. Again, this is not financial advice. I could be totally wrong about all of these. I’m just telling you what I’ve been looking at.
AIkido Pharma Inc. (AIKI): This one’s technically a biotech company, but they’re using AI for drug discovery. Their stock has bounced around a lot over the past year. They actually have some revenue from licensing agreements and partnerships, but they’re still losing money overall. I’m still trying to figure them out.
Remark Holdings, Inc. (MARK): This company does a bunch of different things, including AI-powered facial recognition and computer vision. They’ve had some big contracts in the past, but their financials are… messy. They’ve been burning through cash. The AI tech itself looks promising, but I’m hesitant because of their history of losses.
BigBear.ai Holdings, Inc. (BBAI): Okay, this one is just barely above a dollar as I’m writing this (around $1.15). It provides AI solutions to the US government. I actually like this one more than the other two because they have pretty substantial revenues and a decent customer base. It’s less speculative than the other two, but is also pricier. It is also the only one of the three not traded OTC.
I made a comparison table to make it a little easier to look at them side-by-side.
| Company | Ticker | Industry | AI Focus | Revenue (Most Recent Quarter) | Net Income (Most Recent Quarter) | My Quick Take |
|---|---|---|---|---|---|---|
| AIkido Pharma Inc. | AIKI | Biotech | Drug Discovery | $0.42 Million | -$3.87 Million | Potentially interesting AI application in biotech, but high risk due to losses. |
| Remark Holdings, Inc. | MARK | Technology | Facial Recognition, Computer Vision | $2.18 Million | -$8.23 Million | Interesting tech, but poor financials raise concerns. |
| BigBear.ai Holdings, Inc. | BBAI | Technology | Government Solutions | $47.3 Million | -$2.4 Million | More established and financially sound, but less “pure” AI play. |
What Else Is Out There?
Besides those three, I’ve also looked at companies like Intellinetics, Inc. (INLX) and quite a few others that didn’t even make it to this list. INLX offers an AI document management system. The technology looks alright, but I’m not convinced their current valuation justifies the revenue. It’s a tough market to crack.
The list of companies trading as ai stocks under $1 is constantly changing, so it’s worth doing your own research. Just be careful, and don’t invest more than you can afford to lose.
Before You Buy: Some Harsh Truths
Look, investing in penny stocks is basically gambling. Don’t let anyone tell you otherwise. Most of these companies will fail. Some might get acquired, which could give you a small profit. A very, very small number might actually turn into something big.
I’ve had penny stock investments go to zero. It sucks. But I only invested money I was okay losing. That’s the key. Don’t put your rent money into these things. Don’t mortgage your house. Just use a small amount of “fun money” that you’re prepared to lose.
Also, be prepared for volatility. These stocks can swing wildly. One day they’re up 50%, the next day they’re down 80%. Don’t panic sell. Or do, I don’t care. Just be aware that it’s going to happen.
So, Are These AI Stocks Under $1 Hidden Gems or Just Garbage?
Honestly? Probably garbage. But there’s a tiny, tiny chance that one of them could be something more. That’s the allure. The possibility of hitting it big.
Here’s the deal: Do your homework. Be skeptical. Don’t believe the hype. And only invest what you can afford to lose. If you do all that, you might just have a little fun. Or you might lose all your money. Either way, at least you learned something.