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While large-cap AI stocks like Google and Amazon may seem like the obvious choice, small-cap AI stocks can offer higher growth potential and a more affordable entry point for investors. In this article, we’ll explore the top small cap AI stocks that are worth considering for your investment portfolio.

Why Invest in Small Cap AI Stocks?

Small cap AI stocks are companies with a market capitalization between $300 million and $2 billion. These companies are often in the early stages of growth and have the potential for significant returns.

Investing in small cap AI stocks can be a smart move for several reasons:

Higher Growth Potential

Small cap AI stocks have the potential for higher growth compared to large-cap stocks.

As these companies are still in the early stages of development, they have more room for growth and can see significant increases in stock value.

Affordable Entry Point

AI stocks are often more affordable than large-cap stocks, making them an attractive option for investors with a limited budget.

This allows investors to diversify their portfolio and potentially see higher returns.

Exposure to Emerging Technologies

Small cap AI stocks are often focused on emerging technologies, giving investors the opportunity to get in on the ground floor of a potentially game-changing technology.

This can lead to significant returns as the technology becomes more widely adopted.

Top Small Cap AI Stocks to Consider

Now that we’ve explored the benefits of investing in AI stocks, let’s take a look at some of the top companies in this category.

1. C3.ai (AI)

C3.ai stock
by Michael (https://unsplash.com/@michael75)

C3.ai is a leading AI software company that provides enterprise AI solutions for various industries, including energy, manufacturing, and healthcare.

The company’s AI platform, C3 AI Suite, enables organizations to build, deploy, and operate AI applications at scale.

C3.ai has seen significant growth since its IPO in December 2020, with its stock price increasing by over 200%. With a market cap of $9.5 billion, C3.ai is a small cap stock with high growth potential.

2. UiPath (PATH)

UiPath is a leading robotic process automation (RPA) software company that uses AI to automate repetitive tasks.

The company’s platform allows businesses to streamline their operations and improve efficiency.

Since its IPO in April 2021, UiPath’s stock price has increased by over 20%.

With a market cap of $35 billion, UiPath is a small cap stock with a strong growth trajectory.

3. Veritone (VERI)

Veritone is an AI technology company that provides an operating system for AI, called aiWARE.

The platform allows organizations to analyze, process, and transform audio, video, and other data sources in real-time.

Veritone’s stock price has seen significant growth in recent years, with a 5-year return of over 200%.

With a market cap of $1.2 billion, Veritone is a small cap stock with a strong track record of growth.

4. Appian (APPN)

Appian is a low-code automation platform that uses AI to help businesses build and deploy applications quickly.

The company’s platform allows organizations to automate their processes and improve efficiency.

Appian’s stock price has seen steady growth since its IPO in 2017, with a 5-year return of over 100%.

With a market cap of $9.5 billion, Appian is a small cap stock with a strong history of growth.

5. Alteryx (AYX)

Alteryx is a data analytics software company that uses AI to help businesses make data-driven decisions.

The company’s platform allows organizations to analyze large datasets and gain insights quickly.

Alteryx’s stock price has seen significant growth since its IPO in 2017, with a 5-year return of over 200%.

With a market cap of $8.5 billion, Alteryx is a small cap stock with a strong track record of growth.

Risks of Investing in Small Cap AI Stocks

While AI stocks offer the potential for high returns, they also come with a higher level of risk.

It’s important to consider these risks before investing in any small cap stock.

Volatility

Small cap stocks are often more volatile than large-cap stocks, meaning their stock prices can fluctuate significantly in a short period.

This can lead to higher risk for investors, as the value of their investment can decrease quickly.

Lack of Track Record

Many small cap AI stocks are in the early stages of development and may not have a long track record of success.

This can make it challenging to predict their future performance and can lead to higher risk for investors.

Higher Risk of Bankruptcy

Small cap companies are more likely to go bankrupt than large-cap companies.

This is because they often have less financial stability and may not have the resources to weather economic downturns.

Research

Small cap AI stocks offer investors the potential for high returns and exposure to emerging technologies.

However, they also come with a higher level of risk. It’s important to carefully research and consider the risks before investing in any small cap stock.

If you’re interested in investing in small cap AI stocks, be sure to do your due diligence and consult with a financial advisor to determine the best investment strategy for your portfolio.

With the right approach, small cap AI stocks can be a promising investment for tech enthusiasts looking to capitalize on the growth of the AI industry.

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