You may be getting tired of hearing about artificial intelligence (AI). And let's not kid each other. If you weren't in on some of the large-cap AI stocks earlier this year, you've probably missed the biggest growth.
But that doesn't mean that AI is a bubble. In fact, a more apt analogy may be like waves crashing onto the shore. You've just seen a big wave come in. But there are several smaller companies (waves) that are still out in the water but may be getting ready to make a splash.
However, if you're not in the water, you won't get wet. That's why now is an excellent time to look at some under-the-radar AI stocks. When investors hear under-the-radar AI stocks, they may think about small-cap stocks, even penny stocks. However, as you'll see in this special presentation, that's not necessarily the case. You can find under-the-radar AI stocks even among some large-cap names.
Here are seven under-the-radar AI stocks that showcase distinct opportunities in this evolving market sector.
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- Deere & Company
- Rockwell Automation
- Humana
- Evolv Technologies
- Rekor Systems
- Predictive Oncology
- Lasertec
#1 - Deere & Company (NYSE:DE)
This list of under-the-radar AI stocks starts with one of the bluest of the blue-chip stocks. Deere & Company (NYSE: DE) is an iconic company that is a leader in several industries, including agriculture, construction, and forestry.
Deere is not an under-the-radar stock by any means. However, it’s not immediately clear that investors are pricing in the company’s leadership in AI. The company has a long history of innovation. And in 2023, AI is part of its buying thesis. The company is developing intelligent, connected machines, including self-driving tractors, that are helping farmers improve crop production and lower costs.
If you’re looking for a 10x or even a 2x stock, DE stock is not the one for you. However, if you want exposure to AI without buying an ETF, Deere is a solid choice. The stock is up more than 183% in the last five years. It also pays a reliable dividend with a yield of 1.19% that currently pays $5 per share annually.
About Deere & Company
Deere & Company engages in the manufacture and distribution of various equipment worldwide. The company operates through four segments: Production and Precision Agriculture, Small Agriculture and Turf, Construction and Forestry, and Financial Services. The Production and Precision Agriculture segment provides large and medium tractors, combines, cotton pickers and strippers, sugarcane harvesters and loaders, harvesting front-end equipment, pull-behind scrapers, and tillage and seeding equipment, as well as application equipment, including sprayers and nutrient management, and soil preparation machinery for grain growers.
Read More - Current Price
- $432.49
- Consensus Rating
- Hold
- Ratings Breakdown
- 9 Buy Ratings, 13 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $443.94 (2.6% Upside)
#2 - Rockwell Automation (NYSE:ROK)
Artificial intelligence is having a profound effect in manufacturing. The ability to deliver accurate, data-driven decisions helps minimize costs and optimize processes. Rockwell Automation, Inc. (NYSE: ROK) has been in this space since 2019, when it introduced its FactoryTalk Analytics LogixAI module. This has expanded into a comprehensive digital platform that is built on integrated architecture and communication services that deliver solutions at the edge and in the cloud.
As of September 4, 2023, ROK stock is down about 10% from its all-time high set in December 2021. And since its earnings report in August 2023, analysts give the stock mixed review. However, this may be just a case of investors taking “bad news” as an opportunity to sell. Both the top line and bottom line were higher year-over-year. Earnings are forecast to increase by approximately 10.5% in the next 12 months. That should give the stock price room to move higher.
Like Deere stock, Rockwell offers investors a nice dividend with a yield of 1.52% and an annual payout of $4.72 per share. Plus, the company has increased the dividend for 13 consecutive years.
About Rockwell Automation
Rockwell Automation, Inc provides industrial automation and digital transformation solutions in North America, Europe, the Middle East, Africa, the Asia Pacific, and Latin America. The company operates through three segments, Intelligent Devices, Software & Control, and Lifecycle Services. Its solutions include hardware and software products and services.
Read More - Current Price
- $289.79
- Consensus Rating
- Hold
- Ratings Breakdown
- 9 Buy Ratings, 7 Hold Ratings, 2 Sell Ratings.
- Consensus Price Target
- $301.17 (3.9% Upside)
#3 - Humana (NYSE:HUM)
Humana, Inc. (NYSE: HUM) is the last of the large-cap blue-chip stocks on this list of under-the-radar AI stocks. The aging of America alone makes healthcare one of the most desirable sectors to invest in. As an investor in 2023, you should consider companies like Humana that are using AI to improve efficiencies.
The company has been using AI since 2021 via its partnership with IBM Watson Health. The company’s solutions include an AI-enabled virtual assistant that provides accurate benefits, costs, and provider information.
HUM stock is down 10% in 2023, but the company’s outlook is strong. As of September 2023, earnings are expected to grow at a 13.6% rate. Analysts project a 28.6% increase in the company’s stock. Both of those forecasts are higher than they were in August 2023.
Plus, the stock has an attractive valuation of just 16x forward earnings. And it pays a dividend that has been increasing for 13 years and currently pays $3.54 per share annually.
About Humana
Humana Inc, together with its subsidiaries, provides medical and specialty insurance products in the United States. It operates through two segments, Insurance and CenterWell. The company offers medical and supplemental benefit plans to individuals. It has a contract with Centers for Medicare and Medicaid Services to administer the Limited Income Newly Eligible Transition prescription drug plan program; and contracts with various states to provide Medicaid, dual eligible, and long-term support services benefits.
Read More - Current Price
- $247.10
- Consensus Rating
- Hold
- Ratings Breakdown
- 6 Buy Ratings, 19 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $300.50 (21.6% Upside)
#4 - Evolv Technologies (NASDAQ:EVLV)
Evolv Technologies Holdings, Inc. (NASDAQ: EVLV) is using AI to “evolve” traditional metal detection systems. Specifically, the company’s AI-driven solution analyzes radio frequency (RF) waves to distinguish between a weapon and other metallic devices.
This system is an improvement upon existing millimeter wave scanners that can’t discern one metallic object from another. That’s why people have to follow certain procedures (removing keys, raising their hands, removing shoes) as they move through security checkpoints. The Evolv solution allows people to move through at their regular pace without any of these steps.
That gives the company a huge addressable market. The company generated $19 million in its most recent quarter, but the company is forecasting that it will deliver $20 billion in annual revenue at some point in the future.
This is a small-cap company that is not yet profitable. But in 2023, it’s drawing significant interest from institutional investors. If that trend continues, EVLV stock will likely become a fast-moving AI stock.
About Evolv Technologies
Evolv Technologies Holdings, Inc provides artificial intelligence (AI)-based weapons detection for security screening in the United States and internationally. Its products include Evolv Express, a touchless security screening system designed to detect firearms, improvised explosive devices, and tactical knives; and Evolv Insights that provides self-serve access, insights regarding visitor flow and arrival curves, location specific performance, system detection performance, and alarm statistics.
Read More - Current Price
- $3.79
- Consensus Rating
- Hold
- Ratings Breakdown
- 2 Buy Ratings, 3 Hold Ratings, 1 Sell Ratings.
- Consensus Price Target
- $5.60 (47.8% Upside)
#5 - Rekor Systems (NASDAQ:REKR)
Another sector that provides investors with a different way of playing AI is infrastructure. Rekor Systems, Inc. (NASDAQ: REKR) is “one of the largest aggregators of roadway data.” And behind this is the company's focus on AI and machine learning, which the company uses in its patented technology.
For a company providing best-in-class roadway intelligence, this is still a small company in a small industry. Rekor has a market cap of around $262 million. The encouraging sign for investors is that the company’s revenue is increasing sharply in a sector that is primed for growth. Over the next decade this sector is expected to be valued at over $31 billion.
Like many penny stocks, REKR stock got caught up in the meme stock movement and rocketed to over $20 a share in 2021. Unlike the company’s revenue, that stock price was never sustainable. The company is getting closer to profitability. When it achieves that, this is a stock that could have much higher to go.
About Rekor Systems
Rekor Systems, Inc, a technology company, provides infrastructure solutions for transportation, public safety, and urban mobility markets in the United States and internationally. The company's platforms include Rekor One, an AI-powered roadway intelligence platform; Rekor Command, a comprehensive cross-agency platform that offers various applications for traffic management centers, freeway service patrol, first responders, and maintenance crews; Rekor Discover, a platform that ingests data from its hardware and automates comprehensive analytics and actionable insights about the movement of objects across the roadway; and Rekor Scout platform, which automates previously manual processes with collaborative solutions that keep all stakeholders apprised of developing situations and accelerate reaction times to incidents and offenders.
Read More - Current Price
- $0.82
- Consensus Rating
- Buy
- Ratings Breakdown
- 2 Buy Ratings, 0 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- N/A
#6 - Predictive Oncology (NASDAQ:POAI)
Investing in biotechnology stocks is the definition of risk-reward. If you're willing to take that risk, oncology is one area to consider. It goes without saying that cancer remains one of the leading worldwide causes of death. And for all the advancements that have been made, the end goal remains elusive.
Can AI help? That’s the thesis for investing in Predictive Oncology, Inc. (NASDAQ: POAI). The company is using AI to “change the landscape of oncology drug discovery.” Specifically, the company adds machine learning to its own processes and expertise to determine which drug compounds may have the highest likelihood of success with different tumor types in specific patients.
The company has been increasing revenue by 27% over the last five years. But, here’s where the risk comes in. Earlier this year, the company issued a 1-for-20 reverse stock split. Management says the move was only taken to ensure compliance with NASDAQ requirements. That may be true and if you can stomach that, this is a penny stock that could be a big winner in years to come.
About Predictive Oncology
Predictive Oncology Inc operates as a science-driven company on the oncology drug discovery. It provides various solutions for the oncology drug development. The company, through the integration of scientific rigor and machine learning, has developed the ability to advance molecules into medicine by introducing human diversity earlier into the discovery process with the pairing of artificial intelligence and the biobank of approximately 150K tumor samples.
Read More - Current Price
- $0.69
- Consensus Rating
- Hold
- Ratings Breakdown
- 0 Buy Ratings, 1 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $3.00 (335.0% Upside)
#7 - Lasertec (OTCMKTS:LSRCY)
Lasertec Corporation (OCTMKTS: LSRCY) is a pick-and-shovel play on AI. Specifically, Lasertec helps ensure the quality and performance of semiconductor chips. The phenomenal success of Nvidia Corporation (NASDAQ: NVDA) illustrates how important AI chips will be to the growth of this sector.
And Lasertec has a moat in the industry because it is currently the only company that can inspect chips made with extreme ultraviolet lithography (EUV) for defects. This, along with a backlog of orders and a commitment to releasing new products, explains why, as of September 2023, the company has had seven consecutive years of record revenue and earnings.
One potential risk for investors is that Lasertec is domiciled in Japan. That just means the company doesn’t have to do the SEC filings that are required of American companies.
About Lasertec
Lasertec Corporation engages in the designing, manufacturing, and sale of inspection and measurement equipment in Japan and internationally. The company offers semiconductor related products, which includes mask related systems for extreme ultraviolet and deep ultraviolet solutions, and wafers inspection and review systems; and FPD photomask inspection systems.
Read More - Current Price
- $19.12
- Consensus Rating
- N/A
- Ratings Breakdown
- 0 Buy Ratings, 0 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- N/A
We'll end this presentation where it started. That is, the AI market is not going away. According to the research firm, Allied Market Research, the global AI market will grow from $65.48 billion in 2020 to over $1.5 trillion by 2030. That's a compound annual growth rate of 38% for the remainder of this decade.
This is something that should get the attention of every investor. And it's a key reason why you need to have AI stocks as part of your portfolio. MarketBeat provides a list of artificial intelligence stocks that you can use to compare up to 10 stocks based on various metrics such as price & volume, price performance, and analyst ratings.
If investing in individual AI stocks isn't your style, you can also look into one of several exchange-traded funds (ETFs) that focus on AI.
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