AI Penny Stocks

The stock market has been abuzz with artificial intelligence or AI as people like to call it these days. And the excitement is justified, considering its wide range of applications across various industries.

From healthcare and finance to entertainment and retail, if AI is applied to real-world problems, it can have serious implications for the business world. AI’s ability to transform how we live, work and engage makes it a compelling field.

The rapid advancements in AI have not gone unnoticed in the stock market. Big companies have put huge amount in their business to bring AI’s implications and make work more feasible. The sector has been attracting substantial investments across the globe.

Take a look at these two articles that explain how AI is impacting specific industries -

• AI in the auto sector
• AI in the steel sector

For investors to partake in this AI revolution, many are turning towards penny stocks from AI sector.

Penny stocks, if invested carefully, carry the potential to generate robust returns within a short period. For the simple reason that penny stocks are heavily influenced by liquidity and news flow. And so, any noteworthy announcement can drive a penny stock to new heights or send it plummeting.

Now, imagine the impact if a penny stock were to announce its entry into the AI space.

At the moment however, there aren’t any penny stocks (companies trading below Rs 100) that are directly involved in the AI sector.

Mind you, this will possibly change soon as more companies and people get to know about AI. Till that happens, you could keep a watch on these AI stocks in India.

A word of caution... before you go all in on AI penny stocks, don't forget that such companies usually have shaky financials, with unstable revenues and profits. Furthermore, their dividend payment history may not inspire confidence.

Therefore, if you are considering AI penny stocks, exercise caution and be highly selective.
While both, AI and penny stocks carry the potential to generate outsized returns, they also come with inherent risks, just like any investment.

You can also check out Equitymaster's powerful Indian stock screener to filter the best AI stocks in India.

If you're looking for the top unconventional AI stocks, you can check out Richa Agarwal's video on the same. Richa is the Editor of Hidden Treasure, Equitymaster's smallcap recommendation service.