AI has gone mainstream, with large language models like ChatGPT capturing the public’s imagination. Some smaller, under-the-radar companies are also making significant strides in the AI space. I feel that due to their tiny valuations and market caps, they could one day become long-term winners.
While penny stocks are highly speculative and risky investments, they can also provide outsized returns if a company’s technology and products gain traction. Specifically in the AI space, even small breakthroughs or partnerships could send share prices soaring for these thinly traded stocks.
So, here are the most undervalued AI penny stocks to buy in April. Don’t miss out on these great options.
BigBear.ai (BBAI)
BigBear.ai (NYSE:BBAI) applies machine learning and AI in data analytics, offering significant growth potential.
In 2023, BBAI announced significant strategic developments, including the successful acquisition of Pangiam. The acquisition aligns with BBAI’s goal to create a comprehensive Vision AI portfolio.
Financially, BBAI reported a net loss of $21.3 million in Q4 2023 but also marked its second consecutive quarter of positive adjusted EBITDA at $3.7 million. Revenue for Q4 2023 slightly increased to $40.6 million from $40.4 million in Q4 2022.
Looking ahead, things are also looking accretive for BBAI investors, with a revenue outlook for 2024 set between $195 million and $215 million.
I don’t think investors can go wrong with considering BBAI stock to add to their AI penny stock portfolio for the above reasons. It’s also cheap, trading at just 1.52 times forward sales, making it an undervalued option.
Bullfrog AI Holdings (BFRG)
Bullfrog AI Holdings (NASDAQ:BFRG) intersects AI with psychiatric treatment, aiming to change mental healthcare through technology. BFRG is pre-IPO, but at around $3 per share, it could be an undervalued AI pick for investors to consider.
The company announced a $5.7 million public offering on February 1, with plans to use the proceeds for working capital and other general corporate purposes. €‹
Its main line of business is to use AI to analyze gene expression data. These include the identification of biological subtypes within disorders such as schizophrenia, bipolar disorder and major depressive disorder, offering new perspectives on personalized treatment strategies.
More broadly, the market is shifting away from cookie-cutter solutions in treatment and healthcare and more toward more personalized treatments. The aim is to reduce complications and adverse side effects. By some estimates, the personalized medicine market could be worth around $1 trillion by 2030. That makes BFRG undervalued when one considers its total addressable market.
Guardforce AI (GFAI)
Guardforce AI (NASDAQ:GFAI) leverages AI technology across a wide range of information and security solutions, offering consulting services.
The company reported a net loss of $13.8 million last year, alongside a basic and diluted loss per share of $4.35. The company’s assets increased to $64.1 million from $61.2 million, with current assets including a significant rise in cash and cash equivalents from $6.9 million to $24.7 million.
Despite its influx of cash, it previously made some serious moves in the M&A department. That includes acquiring robot-related business assets from Shenzhen Kewei Robot Technology, which I anticipate will help give it an edge in the market.
GFAI’s press release about its acquisition states that it includes the “select equipment assets, client base in the sales pipeline and related sales channels and staff, as well as provide rights to the permanent use of its patents, thereby enhancing Guardforce AI’s new Robot-as-a-Service (RaaS) sales and capabilities.”
Finally, it may be undervalued. There are accounting profits predicted by Wall Street analysts within the next 12 months and trading at just around 1 times sales at the time of writing suggests it is a good investment.
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Read More: Penny Stocks — How to Profit Without Getting Scammed
On the date of publication, Matthew Farley did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Matthew started writing coverage of the financial markets during the crypto boom of 2017 and was also a team member of several fintech startups. He then started writing about Australian and U.S. equities for various publications. His work has appeared in MarketBeat, FXStreet, Cryptoslate, Seeking Alpha, and the New Scientist magazine, among others.