7 AI Stocks to Buy Under $5 in August 2023

Stocks to buy

Let’s take a look at some of the top AI stocks in August 2023. For the most part, the average investor is familiar with the major names in the sector, such as  Nvidia (NASDAQ:NVDA) and Microsoft (NASDAQ:MSFT). All thanks to their pioneering efforts in the field of artificial intelligence and machine learning. And while both are deserving of attention and have provided explosive gains, investors are left wondering about lower-priced AI stocks that go unnoticed. That’s the focus of this article: AI stocks below $5. They remain unheralded but offer substantial upside that appeals to the risk-tolerant investor. 

With that, here are some of the top, sometimes overlooked, AI stocks in August 2023.

AI Stocks in August 2023: Veritone (VERI) 

Source: shutterstock.com/YAKOBCHUK V

Veritone (NASDAQ:VERI) is an enterprise AI stock that offers multiple solutions targeted toward media firms primarily. The company sells solutions that serve the advertising space in particular and include life-like avatars, speech and voice products, and metaverse-oriented services among others. If for nothing else, Veritoneis worth watching because it’s a company that could carve out a significant position in the AI avatar space. That said, Veritone markets itself as being industry agnostic with a website that is targeting all industries, not media alone. 

The firm’s generative AI products have won awards at industry trade shows and was awarded the product of the year for its avatar product. Veritone is also making major inroads into the intersection of AI and recruiting and recently acquired Broadbean. Veritone’s financials are neither terrible nor particularly impressive. In Q1, revenues fell by 12% to $30.26 million but losses hardly changed at more than $22 million. 

AI Stocks in August 2023: Amesite (AMST)

Source: shutterstock.com/everything possible

Amesite (NASDAQ:AMST) is a company that applies AI technology to course design for schools and businesses. Its stock is one of the most compelling from the standpoint of pure upside potential. With a share price of $3.70 and a target price of $40.80, Amesite offers the potential to multiply investors’ capital. 

One of the more interesting aspects of Amesite as an investment is how quickly it could turn around. Sales have been stagnant over the last year and totaled under $205,000 during the first quarter of this year. That is very similar to the $209k a year earlier. However, losses are narrowing and went from $2.2 million to $928,000 over that period. 

Amesite is listed as having 17 employees so it’s reasonable to assume the firm is running very lean in an attempt to find a profitable business model first. If that’s indeed the case, then Amesite could find what works for it, then scale that and become instantly profitable.  

AI Stocks in August 2023: SoundHound AI (SOUN) 

Source: shutterstock.com/Den Rise

SoundHound AI (NASDAQ:SOUN) is, like Veritone, another stock in the AI voice solutions sector. The company was built on the firm’s proprietary technology in several languages and is sold in the automotive, TV, IoT, and customer service industries. 

SoundHound AI’s fundamentals are pretty much what investors might expect from a young firm in this sector: Impressive growth balanced by substantial losses. The firm made $6.7 million worth of sales during the first quarter leading to a net loss of $26.37 million. The positive news regarding its losses is that they only increased by 3% during the period. 

What’s most interesting about SoundHound AI, and a bit difficult to understand, is its backlog. That backlog increased by 46% in Q1 and stood just below $336 million. The company’s products and services seem to be in demand. However, SoundHound AI also seems incapable of delivering those products and services to potential clients and that backlog is getting bigger. If the company can solve that bottleneck it should logically unleash a stream of new income for the firm and propel it higher quickly. 

Lantern Pharma (LTRN)

Source: Shutterstock

Lantern Pharma (NASDAQ:LTRN) is a biotech firm leveraging AI in the race to develop therapeutics. It’s no secret that it takes a long time to develop pharmaceuticals, costs a lot of money, and often results in failure. 

A big part of the issue is that the process of identifying compounds that could become treatments for a given disease is very time-consuming. The so-called drug discovery phase is particularly troublesome. However, AI is applicable to the process and can cut timelines and costs making it a high-priority area. 

Essentially, AI algorithms can be calibrated to particular purposes and do the work faster than humanly possible. For example, one of Lantern Pharma’s algorithms is calibrated to accurately predict a given compound’s blood-brain-barrier permeability. Blood-brain-barrier permeability affects the efficacy of drugs, particularly those for brain cancer drugs. 

The firm’s LP-300 compound is being tested in Phase 2 clinical trials in patients with relapsed non-small cell lung cancer (NSCLC) who never smoked. Its balance sheet showed $51.5 million in cash and a net loss of $3.9 million to end Q1. 

Verses AI (VRSSF) 

Source: Shutterstock

Verses AI (OTCMKTS:VRSSF) is an over-the-counter stock developing several interesting AI products. Fundamentally it’s heading in the wrong direction: Revenues are shrinking and losses are increasing. Despite all of the obvious risks, it is worth considering given its product suite. So, that’s where we’ll start. 

Verses AI offers a suite of AI-based products including KOSM, WAYFINDER, and GIA. All three products are either in the early stages of development or are to be released at a later date. 

GIA is an AI personal assistant that is slated to be released in the third quarter. Not much information is given on it on the firm’s website. WAYFINDER is a dynamic routing service applicable to warehouse order picking and is more developed than GIA. KOSM is arguably the most interesting of Verses AI’s products. The firm bills it as ‘OS for AI’ which means it integrates the software and hardware across systems and leverages AI to deliver more actionable data. It’s a high-minded firm that may simply fail. However, if it can achieve all it hopes to do then expect Verses AI to boom. 

GSI Technology (GSIT) 

Source: shutterstock.com/Peshkova

GSI Technology (NASDAQ:GSIT) is a chip firm that is intimately connected to the development of AI. Its stock is absolutely worth buying despite the firm’s relative anonymity. GSI Technology’s success hinges on its Gemini Associative Processing Unit (APU). APUs fundamentally change data processing with GSI Technology’s Gemini APU directed toward AI in particular. 

It’s important to understand APUs from a fundamental perspective in order to understand why investing in GSI Technology makes sense. APUs allow data to be processed in parallel rather than serially between the processor and the memory. It’s technically complex but the point is that Gemini APUs will allow greater processing to be done in the AI field. 

The company is growing but not particularly fast. It continues to produce losses. However, it simply has an interesting product that has the potential to grow rapidly. The company is relatively stable and will remain interesting to investors who have a deep technical understanding of computing processes as they relate to artificial intelligence. 

ShiftPixy (PIXY) 

Source: metamorworks / Shutterstock.com

ShiftPixy (NASDAQ:PIXY) is an AI-driven firm and stock in the human capital space. The company leverages AI to increase the speed of its gig-worker hiring platform. It’s quite simple: Gig workers upload a video interview answering a few questions. Hiring managers then pass acceptable candidates who then pass through an AI-driven experience to start their shift. The company calls this service its ‘Instant Interview’ feature. 

More generally, ShiftPixy is a gig-economy platform for workforce management. ShiftPixy is in a growing field given the seismic shifts occurring throughout the workforce. Gig work is rising rapidly as traditional employment becomes less common. 

That said, ShiftPixy is the least attractive of all of the shares discussed here. The firm’s financial statements are difficult to find and not up to date. It is addressing a growth opportunity as the workforce shifts and AI becomes more mainstream. However, investors must note that ShiftPixy is clearly speculative at this point while it offers a real upside. 

Penny Stocks

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On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Alex Sirois is a freelance contributor to InvestorPlace whose personal stock investing style is focused on long-term, buy-and-hold, wealth-building stock picks. Having worked in several industries from e-commerce to translation to education and utilizing his MBA from George Washington University, he brings a diverse set of skills through which he filters his writing.

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