We recently published a list of The 7 Most Popular AI Penny Stocks Under $5. In this article, we take a look at how Predictive Oncology Inc. (NASDAQ:POAI) compares to the other popular AI penny stocks under $5.
An analysis of AI breakthroughs
Artificial intelligence has become increasingly important for businesses and industries to succeed in today’s rapidly evolving economy. Grand View Research reported that the global AI market was valued at $196.63 billion in 2023 and is expected to grow at a compound annual growth rate of 36.6% from 2024 to 2030, reaching $1.81 trillion by the end of the forecast.
Tech giants are driving AI adoption. Wall Street’s favorite GPU maker saw significant growth and its market cap surpassed $3 trillion due to strong demand for GPUs. In March, the Blackwell platform was launched with the GB200 superchip, which continues to dominate the AI chip market. This chip can train AI models with over a trillion parameters, which is essential for developing advanced Large Language Models (LLMs).
This advancement of natural language processing in AI is a significant breakthrough. AI language models are being integrated into the business world and beyond. Economists Joseph Briggs and Devesh Kodnani report that the ability of AI tools to generate human-quality content is a huge milestone that bridges the communication gap between humans and machines. According to Goldman Sachs investment advisors, these AI tools could be worth $7 trillion in the next 10 years and contribute to a 7% increase in global GDP.
A recent study from Stanford University found that companies train AI models faster than academic institutions. In 2023, industry-trained AI had nearly 51 significant machine learning models, while academic institutions managed only 15. This trend continued in 2024 despite rising training costs. ChatGPT 4, ChatGPT’s latest model, cost about $80 million to train. Google’s Gemini Ultra cost about $191 million.
OpenAI’s approach of fostering collaborative partnerships rather than directly competing with tech giants makes it an exceptional model. Macquarie’s Fred Havemeyer (leading software equity analyst) praised GPT 4 for its “emotional intelligence.” The growing demand for AI chips, evident in OpenAI’s use of over 1.7 trillion parameters in its GPT 4 model, will further help NVIDIA and other AI chip makers grow.
On August 20, Bloomberg reported that OpenAI is releasing a feature that will allow companies to use their enterprise data to customize GPT 4, allowing it to be trained with additional information for niche tasks. This is an example of how companies can optimize the AI model to act as a customer service chatbot for their subject areas. According to DeepL CEO Jarek Kutylowski, specialized AI models are essential for companies to grow vertically.
PwC reported that the global AI market could contribute $15.7 trillion to the world economy by 2030, surpassing the combined output of China and India. It will also be responsible for a 26% increase in local GDP. 45% of the total GDP gains during this period will come from AI deployment. It will bring economic benefits through efficiency gains for higher productivity, automated routine tasks, and higher-value work. Goldman Sachs reported that the average productivity increase from AI deployment is 25%.
Major economic benefits from AI are expected in China with a 26% increase in GDP and North America with a 14.5% increase in 2030, together accounting for nearly 70% of the global economic impact. The impact of AI is clear when we see examples like the CNBC Disruptor 50 that are integrating AI into their core business. 34 companies consider it critical to their revenue, while 13 cite generative AI as a key revenue driver.
By 2025, 97 million people are expected to be employed in AI-related roles, many people have also lost their jobs due to AI. Bloomberg reported that more than 130,000 employees were laid off in over 400 companies this year. This number is still 40% lower compared to layoffs in 2023. Companies see this as the only way to reduce costs and therefore are increasing their investments in AI.
There are also concerns that AI will provide scammers with greater security because of its ability to create convincing fake images and messages. Warren Buffet, chairman and CEO of Berkshire Hathaway, says AI fraud will be the next big “growth industry.”
Most analysts and experts are optimistic about AI in the long term. According to analysts at Goldman Sachs, many companies plan to spend over a trillion dollars on AI infrastructure in the coming years. In August, Nicole Peng, senior vice president of mobility at Canalys, suggested that the AI industry may be recession-proof. This is because AI advances are not just “improvements” to existing businesses, but rather meet an inevitable consumer demand for greater efficiency and improved solutions for businesses.
The AI industry is booming, and since ChatGPT launched, every industry and company has been turned on its head. Finding untapped AI stocks with huge growth potential is a challenge right now, and that’s where we come in. Now let’s look at the best AI penny stocks to buy now, according to hedge funds.
Our methodology
To compile our list, we scoured ETFs, online rankings, and Reddit threads to compile a list of 12 AI penny stocks. We then selected the 7 stocks that were most popular among elite hedge funds and that analysts were bullish on. The stocks are sorted in ascending order by the number of hedge funds that hold shares in them (as of Q2 2024).
Why do we care about the stocks hedge funds invest in? The reason is simple: Our research has shown that we can outperform the market by mimicking the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks each quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (Further details can be found here).
A doctor in a laboratory overseeing the development of artificial intelligence (AI).
Predictive Oncology Inc. (NASDAQ:POAI)
Number of hedge fund holders: 2
Predictive Oncology Inc. (NASDAQ:POAI) is a knowledge and science-based company that uses AI to help find and develop better cancer treatments.
In the second quarter of 2024, the company reported revenue of $279,000, compared to $490,000 in the same period in 2023. Net loss per share was $0.68, compared to $0.98 in the second quarter of 2023.
Revenues came primarily from the company’s EGAN business unit, which focuses on using AI for drug discovery and development processes, such as analyzing large collections of tumor samples to see how patients respond to drugs and improve treatment outcomes. The company works with hospitals and research institutions.
Predictive Oncology Inc. (NASDAQ:POAI) has expanded its AI offerings to discover new biomarkers for cancer. A recent study with UPMC Magee-Womens Hospital identified factors that affect overall survival in ovarian cancer. Such advances help address unmet needs in oncology, such as ovarian cancer, where treatment options are limited. Management noted that the biomarker discovery market is estimated to exceed $51 billion in the second quarter of 2024.
One key advancement is new 3D cell culture technology, which provides an accurate method for testing drug candidates, reducing costs and time to market. On the second-quarter earnings call, management said the 3D cell market is expected to grow from $1.4 billion in 2022 to $5.3 billion in 2032, representing 14% annual growth. Such ventures make Predictive Oncology Inc. (NASDAQ:POAI) one of the best AI penny stocks to buy right now. The stock is a best-positioned trailblazer for the use of AI in oncology, an industry that is still in a very early stage of growth.
2 hedge funds hold shares in the company (as of June 30) with Renaissance Technologies He is the largest shareholder with a stake worth $25,663.
Total POAI 6th place on our list of the most popular AI penny stocks under $5. While we recognize the potential of POAI as an investment, we believe that some AI stocks are promising to deliver high returns and do so within a shorter time frame. If you are looking for an AI stock that is more promising than POAI but trades at less than 5 times its earnings, read our report on the cheapest AI stock.
READ MORE: $30 trillion opportunity: The 15 best humanoid robot stocks to buy, according to Morgan Stanley And According to Jim Cramer, NVIDIA has “become a wasteland”.
Disclosure: None. This article was originally published on Insider Monkey.
