Investors do not require a reason to buy shares in companies associated with artificial intelligence. As this area is growing rapidly, it has naturally drawn a lot of interest. Nevertheless, there is a distinct need for lesser known AI stocks; these are companies that haven’t received the same attention as Nvidia or some other well known names.
Not to single out the semiconductor leader, but this company faced a concerning amount of selling pressure after briefly becoming the most valuable business globally. In other words, following a major win, the danger of suffering losses increases. Furthermore, when significant losses occur, late investors are likely to be the first ones to exit. This can lead to even larger declines than usual.
On the other hand, lesser known AI stocks might have the opportunity to develop without immediate pressure. This field is similar to a dish that requires slow cooking. It might take a while to prepare, but the outcome could be rewarding. With this in mind, here are some interesting options to explore.
InvestorPlace Financial Market Updates, Investment Guidance, and Trading Strategies
UiPath (PATH)
Source: rafa press / Shutterstock. com
Located in New York City, UiPath (NYSE:PATH) operates in the software infrastructure sector. It’s considered one of the hidden AI stocks due to its focus on robotic process automation (RPA). This technology uses AI to carry out repetitive tasks automatically. As a result, companies experience notable cost savings through enhanced efficiency and optimization of their operations.
Unfortunately, UiPath has been overlooked because of the competition in the semiconductor industry. This is unfortunate since PATH stock shows strong financial performance. For example, from the second quarter of fiscal 2024 (which corresponds to the 2023 calendar year) to the first quarter of fiscal 2025, the software company reported an average earnings per share of 14 cents. This achievement resulted in an impressive earnings surprise of 79. 3%.
Over the last year, UiPath did register a net loss of $86. 72 million. However, their sales reached $1. 35 billion. Additionally, the most recent quarterly sales growth rate compared to the previous year was 15. 7%. Experts predict a 7. 6% increase in revenue for fiscal 2025, bringing it to $1. 41 billion.
In the following year, sales could rise by 11. 6% to reach $1. 57 billion. Therefore, PATH is among the hidden AI stocks worth considering.
Lemonade (LMND)
Source: Stephanie L Sanchez / Shutterstock. com
Amid talks about advanced graphics processors and their importance in generative AI, it’s important to recognize that some companies are already using digital intelligence to assist their clients. One such company is the insurance technology firm Lemonade (NYSE:LMND). Utilizing an AIdriven platform, Lemonade offers essential insurance services to individuals through a smooth and user friendly interface.
As time goes on, the company might be able to shift more expenses onto customers, thanks to machines handling the heavy lifting of underwriting. Although the business carries some risk, the idea is very attractive. Additionally, Lemonade offers solid financial backing. In the last year, it achieved a positive surprise of 12. 8%.
It’s important to note that Lemonade is not making a profit right now. Still, its losses for each share are lower than what experts had predicted. In the most recent twelvemonth period, the company earned $453. 7 million in revenue. Its annual sales growth rate stands at 25. 1%.
For the fiscal year 2024, analysts expect a significant increase of 20% in revenue, bringing it to about $515. 73 million. If you like to speculate, LMND could be one of the AI stocks worth looking into.
Cisco (CSCO)
l
Source: Valeriya Zankovych / Shutterstock. com
Located in San Jose, California, Cisco (NASDAQ:CSCO) is a prominent player in the communication equipment sector. Recently, the company made headlines by purchasing Splunk for $28 billion. According to industry source CRN, Cisco said this acquisition aims to “merge the cybersecurity and observability strengths of both companies. ”
In the long run, company leaders expect to create a unique, AIdriven data platform. Since AI can also be used for harmful purposes, Cisco could benefit from combining digital intelligence with effective security measures. Hence, it is an AI stock to keep in mind.
From a financial viewpoint, Cisco isn’t particularly thrilling, but it reliably performs well. Over the last four quarters, its average earnings surprise has been 6. 45%. In the latest twelvemonth period, the company reported a net income of $12. 12 billion, translating to earnings of $2. 96 per share. During this timeframe, the revenue was $55. 36 billion.
For the fiscal year 2024, experts predict a steady increase in earnings per share to $3. 70. However, revenue might see a minor decrease to $53. 7 billion. On the bright side, fiscal 2025 could bring better results, with sales possibly increasing to $55. 67 billion. With a dividend yield of 3. 38%, CSCO is among the AI stocks worth considering.
Cerence (CRNC)
Source: shutterstock. com/everything possible
Located in Burlington, Massachusetts, Cerence (NASDAQ:CRNC) functions within the application software market. According to its public information, Cerence provides AIdriven virtual assistants for the mobility and transportation sectors in the U. S. , as well as in several other countries. Fundamentally, the underlying business has the potential to greatly enhance customer experience and improve driver safety.
By making it easier for drivers to connect with their vehicles quickly and intuitively, they can get the information they need, allowing them to focus back on the road. Despite its relevance, CRNC stock hasn’t received much attention. Its performance in the market this year has been quite poor.
Nevertheless, the company has succeeded in achieving some unexpectedly strong outcomes in previous quarters. In the trailing twelve months, the software company reported earnings of $348. 58 million. For the fiscal year 2024, experts predict a massive increase in profits, estimating earnings to reach 87 cents per share. On the revenue side, sales may reach $329. 5 million, marking an 11. 9% growth compared to the last year.
It is also trading at a sales ratio of 0. 36X. This could attract investors who are looking for opportunities, making it one of the speculative AI stocks worth considering.
BigCommerce (BIGC)
Source: Tierney J / Shutterstock. com
Based in Austin, Texas, BigCommerce (NASDAQ:BIGC) is another player in the application software field. According to its company profile, BigCommerce offers a SoftwareasaService (SaaS) platform for large corporations, small businesses, and medium sized firms. It is considered one of the less obvious AI stocks, as it uses digital technology to gather customer insights and offers features like personalized suggestions and flexible pricing tactics.
It is one of the smaller and, therefore, riskier options available within the larger AI sector, with a market cap of under $1 billion. Nonetheless, BigCommerce is performing well. Over the last four quarters, the company’s average earnings per share (EPS) stood at 3. 5 cents, resulting in an earnings surprise of 85. 28%.
In the trailing twelve months, BigCommerce faced a net loss of $48. 94 million, equivalent to 64 cents per share. Yet, the revenue reached $318 million. Looking ahead to the end of the year, analysts forecast a significant rise in EPS to 24 cents. Sales are also expected to increase by nearly 8% to $333. 19 million.
For the next year, EPS is predicted to rise further to 34 cents, while revenues may hit $362. 15 million.