7 AI Stocks Under $50 Set to Lead the Second Wave of Innovation

SoundHound AI Inc. (NASDAQ: SOUN) was one of the best-performing stocks in 2024, rising over 840%. The company is tightly focused on using Voice AI solutions to move from sound recognition to conversational intelligence.  

SoundHound’s technology is being used by over 10,000 restaurant locations. And, as 2025 begins, McDonald’s Corp. (NYSE: MCD) is considering using the company’s technology in its 40,000 locations. It’s also being used in a range of other industries, including automotive, smart devices, hospitality, and contact centers. 

Through the first three quarters of 2024, SoundHound nearly doubled its revenue year-over-year. However, the reason why you can still get the stock for under $20 (as of January 2, 2025) is that the company has yet to turn a profitable quarter. That’s not forecast to change in 2025; but, if it does, SOUN stock is likely to make a sharply higher move. And one reason to believe it could happen is that analysts started raising their price targets in December.  

If investors didn’t understand the significance of a company’s supply chain prior to 2020, they do now. And that’s why Symbotic Inc. (NASDAQ: SYM) is an AI stock to watch. The company is loosely defined as a robotics warehouse automation company. However, it uses advanced AI software to streamline the entire product distribution process for companies like Walmart Inc. (NYSE: WMT) and Albertson’s Companies Inc. (NYSE: ACI).  

In 2024, Symbotic posted an impressive 58% year-over-year revenue growth. However, the bigger story is likely to be its earnings growth, which posted year-over-year growth nearly three times that of revenue. The company delivered its first three profitable quarters.  

Analysts predict an additional 150% earnings growth in 2025, which correlates with a consensus price target of $42.54—73% higher than the SYM stock price on January 2, 2025. 

Unity Software Inc. (NYSE: U) is a software company named for its Unity gaming platform, which allows users to create and build interactive 2-D and 3-D environments for gaming and other applications. The company launched Unity 6 in 2024, the latest upgrade to its gaming platform.  

Unity stock jumped over 6.5% on the first trading day of 2025 after the social media influencer Roaring Kitty posted a cryptic message on X about artist Rick James performing his song “Unity.” 

However, a better reason to consider U stock in 2025 is the way the company uses AI to not only enhance the consumer experience, but to also make it easy for developers to quickly and efficiently create their assets and virtual worlds.  

Unity went public in 2021 during the meme stock craze. That makes price discovery tricky since the high price of around $171 is clearly an outlier. But that also means that the current price, which fell 42% in 2024, may be overdone as well.  

In real estate, location is everything. When it comes to stocks, the sectors in which it does business matter a lot. That's a synopsis of the bull case for Bentley Systems Inc. (NASDAQ: BSY). The software development company has customers in the industrial, aerospace, and defense sectors—three sectors expected to be among the biggest winners in 2025. Bentley recently launched several new AI platforms that offer its customers improved productivity and efficiency.  

Bentley Systems is another company on this list that went public in 2021. Like many stocks at that time, it shot higher without the earnings to back it up. The stock fell about 5% in 2024 despite year-over-year earnings climbing nearly 75%. Analysts believe the company’s earnings will grow by about 14% in the next 12 months. That supports analysts’ expectations for a 25% increase in the BSY stock price over that same period.  

A cloud computing company that utilizes AI is not particularly distinctive. But what separates DigitalOcean Holdings Inc. (NYSE: DOCN) from its competitors is its customer base of small- to mid-sized businesses. This allows the company to service a market that enterprise cloud providers generally avoid. And its products are backed by DigitalOcean's ability to provide technical support for these companies, which may lack in-house expertise. 

DigitalOcean entered the graphic processing unit (GPU) market in 2023 after its acquisition of Paperspace. And the company is now one of few cloud providers to offer fractional GPU capacity, making it more cost-efficient for these smaller companies to deploy AI. 

Like other stocks in this presentation, DigitalOcean went public in 2021, and the stock is down sharply from its closing price of around $100 in November 2021. However, DOCN stock dropped about 5% in 2024, and analysts have a consensus price target that suggests the stock may have a 22% upside in 2025.  

After climbing 113% in 2024, many investors wonder what Lemonade Inc. (NYSE: LMND) can do for an encore. Analysts are bearish on the stock, which fell approximately 7% in December 2024, and believe that more downside is on the way. 

For those who are unfamiliar, Lemonade disrupted the insurance industry by using AI and machine learning to establish its pricing policies. However, the company is young and may be years away from being profitable. Plus, after its initial disruption, the legacy insurance companies are increasing their digital capabilities.  

But investors shouldn’t discount Lemonade's status as a Certified B Corporation. This means that it focuses on social and environmental issues in addition to adding shareholder value. In 2025, many younger investors may find that business model appealing.  

LMND stock climbed approximately 100% since it reported earnings in October. A pullback in the stock might be necessary. But the consensus price target of around $30 may not tell the whole story. Analysts remain mixed, with at least two of them raising their price targets significantly in November 2024.  

The last name on this list is Rekor Systems Inc. (NASDAQ: REKR). The company provides infrastructure solutions for transportation, public safety, and urban mobility markets. Its mission is to make the world safer, smarter, and greener. 

Among the company’s platforms is Rekor One, its in-house, AI-powered roadway intelligence platform. The company is well-positioned to provide innovative solutions as the United States rebuilds its transportation infrastructure.  

REKR stock was down about 50% in 2024. However, it’s worth noting that the stock climbed about 75% in December. This bucked the trend of many technology stocks, which were beaten down. 

Like many of the companies on this list, Rekor Systems is not yet profitable. However, if the company continues to grow its revenue at the compound annual growth rate (CAGR) it has managed for the last four years, it may hit its goal of profitability by the end of its 2024 fiscal year, which will be in the middle of 2025. 

Before considering an investment, you should know that only one analyst covers Rekor Systems. But that analyst gives REKR stock a Strong Buy rating.