3 Little-Known AI Stocks That Could Be the Next Big Thing

by | May 23, 2024 | Markets

But that doesn’t mean the AI sector is dead €” far from it. The best AI stocks beyond well-known names like Nvidia (NASDAQ:NVDA) are slowly building behind the scenes, if not unknown to the wider investor sector. But these companies’ long-term potential is becoming increasingly clear. For investors willing to wait, patience could offer massive rewards as the tech matures and their respective operations dreams come into focus.

Evolv Technologies (EVLV)

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As public and private physical security takes an increasingly central role in event and infrastructure planning, AI stocks like Evolv Technologies (NASDAQ:EVLV) may soon become the next big thing in threat detection. Evolv’s screening tech detects concealed weapons while also leveraging threat-detection tools to identify and prevent harmful acts.

The best part €” for the general public €” is that, since Evolv’s tech is AI-driven, it processes security screening queues much faster than traditional human visual screening processes.

Of course, investors have plenty to like about this AI stock. Though fairly new, the company added more than 300 new clients to its portfolio last year which contributed to a 120% growth in annual recurring revenue. As expected from such a new, growing company, EVLV isn’t yet profitable.

Moreover, despite trading in small-cap territory, shares slid earlier this month following an earnings miss. Still, Evolv’s trajectory is nearly unmatched compared to AI stocks of a similar size, and its proven market potential could spur long-term growth despite discount pricing.

Riot Platforms (RIOT)

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Riot Platforms (NASDAQ:RIOT) certainly isn’t a little-known stock, but its potential among AI stocks goes generally overlooked. The Bitcoin (BTC-USD) mining company is, of course, best known for its role in crypto-centric operations. But mining is increasingly pricy for fewer rewards, and artificial intelligence companies need vast quantities of power to run even the most basic tasks €” making Riot Platforms a perfect potential partner moving forward.

Riot already sells unused energy back to local municipalities and utility operators; last year, the company generated $71.2 million in revenue from this sales stream. While Riot isn’t yet in the artificial intelligence energy offering business, it’s likely just a matter of time until the economic arrangement just makes sense for both parties.

Likewise, data centers aren’t being built quickly enough to match AI demand €” meaning existing GPU facilities, like Riot’s, may soon come at a premium. In the meantime, investors waiting for Riot’s potential as an AI stock to come to fruition can rest easy knowing they have peripheral exposure to Bitcoin, considering the crypto’s 10% jump this week alone.

Parsons (PSN)

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Parsons (NYSE:PSN), a defense tech company with a diverse range of products in intelligence and security may be one of today’s most overlooked AI companies, considering the sector is stacked with name-brand competitors like Palantir (NYSE:PLTR). But whereas Palantir and similar defense tech companies focus on the software side, Parsons brings a range of AI offerings to very tangible hardware-centric tech developments.

The company’s achievements include ballistic missile site development, rocketry hardware, nuclear site management, and infrastructure development (which could become a major political talking point as the election heats up). Parsons’ wide-ranging operations demand robust technical data management and oversight, allowing it to lead with internally managed AI solutions, and push the boundaries of its AI-enabled hardware.

In addition to defense applications, Parsons is expanding its AI-driven drone solutions to include infrastructure inspection tools. These tools transform the evaluation of existing and ongoing infrastructure projects like bridges, roadways, and water treatment facilities. This positions Parsons as a key player in deploying AI to challenging or hazardous areas that require comprehensive and in-depth safety assessments.

On the date of publication, Jeremy Flint held a long position in RIOT. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Jeremy Flint, an MBA graduate and skilled finance writer, excels in content strategy for wealth managers and investment funds. Passionate about simplifying complex market concepts, he focuses on fixed-income investing, alternative investments, economic analysis, and the oil, gas, and utilities sectors. Jeremy’s work can also be found at www.jeremyflint.work.

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