If you’re wondering if there is still time to invest in machine learning stocks, some recent research will provide some useful context. A recent study by WallStreetZen revealed what many investors already suspected. Specifically, companies that mentioned artificial intelligence in their earnings reports, saw their stock prices rise an average of 4.6%. And for technology companies, that average increase was even higher at 11.9%.
Machine learning is a key feature that is fueling current artificial intelligence applications. However, this is still an emerging story. Machine learning will power these applications in ways we have yet to imagine.
With that said, the recent AI mania has taken the valuation of some popular large-cap stocks to overvalued levels. Fortunately, there are still several under-the-radar machine learning stocks that may be offering an appealing opportunity. Here are three small-cap, machine-learning stocks that are trading for less than $10, but may be ready to move much higher when investor sentiment changes.
Taboola.com (TBLA)
Leading off this list of machine learning stocks is the ad-tech firm, Taboola.com (NASDAQ:TBLA). The company uses machine learning (or deep learning) to match property owners needing engagement and monetization with advertisers looking to reach those sites directly. The company calls the process search “in reverse.”
It’s a simple, but efficient business model that is generating consistent revenue. Despite its 1.3 billion market cap, the company has generated $1.3 billion in revenue in the last 12 months. The company also recently inked a partnership with Yahoo that will add a boost to the top line.
What is likely holding TBLA stock back is its earnings. The company is not yet profitable, but that’s expected to change in the next 12 months, and the Yahoo deal is a big reason for optimism.
Short interest is up about 7.2% in the 30 days ending September 12, 2023. That may keep downward pressure on the stock. However, if you have the patience to wait it out, TBLA stock is an intriguing machine-learning stock to consider.
Evolv Technologies (EVLV)
I included Evolv Technologies (NASDAQ:EVLV) on a list of little-known AI stocks to buy in August. I’ll reprise that pick on this list of machine learning stocks to buy. The company is answering the “so what” question as it relates to AI in an intriguing way.
The company’s mission is to transform the physical security industry. Its Evolv Express system is powered by its Evolv Cortex AI software platform. This platform is constantly evolving through the use of machine learning to deliver a cost-effective solution that processes data 10 times faster than traditional metal detectors that allow the company’s devices to screen up to 3,600 people per hour, per system.
The possible applications give Evolv the potential to grow revenue and, in time, profits. For now, this is a company with a market cap of less than $1 billion that trades for around $6.50 per share. However, about 50% of the company’s stock is owned by institutional investors which gives the stock fuel to move higher.
Lantern Pharma (LTRN)
Many biotech stocks are penny stocks. And that’s the case with Lantern Pharma (NASDAQ:LTRN). However, the company uses machine learning in a distinct way that puts it on this list of machine learning stocks.
Here’s the case for Lantern in a nutshell. Drug development is expensive and time-intensive. However, biotechs like Lantern are starting to use machine learning and AI models in an attempt to shorten the time needed to find treatments for conditions that have eluded research. This includes certain types of cancer.
And that’s where the story gets more intriguing. The company recently received FDA clearance to bring its LP-184 candidate into Phase 1 clinical trials to test its effectiveness against advanced solid tumors and brain cancers. It also recently presented data highlighting the anti-tumor potency of its LP-284 candidate which is targeting non-Hodgkin’s lymphomas.
With a $46 million market cap, this is a tiny company that is still in the pre-revenue stage. But risk-tolerant investors may find this to be a blockbuster stock in time.
On the date of publication, Chris Markoch had a LONG position in EVLV. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.