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Exploring Small-Cap AI Opportunities in a Big-Cap Dominated Market

New York, N.Y., January 24, 2024 The recent rally in artificial intelligence (AI) investments had a notable exception: small caps. The Street’s James “Rev Shark” DePorre noted the stark contrast between the current AI bubble and the more inclusive Internet bubble of the late 1990s in his column “There is an AI Bubble, but There is No Small-Cap Participation.”

He wrote, “During the Internet bubble in 1999-2000…hundreds of small-caps attracted speculative traders and helped drive the frenzy. The AI bubble is nothing like that. […] Traders like me who favor aggressive trading of smaller stocks with good charts and fundamentals feel extremely frustrated with this market action.”

He is not the only expert who recognizes overlooked opportunities in the small-cap world. Historically, small-cap companies have been pivotal in driving market dynamics and investor returns, yet this recent rally has seemingly missed the potential for growth and innovation in smaller stocks.

At PRISM MarketView, we are keenly aware of this gap. Our approach is to identify and highlight small-cap AI stocks, among other key and emerging indices, that show promise but are currently underrepresented in the broader market narrative.

To that end, we have identified three small-cap AI stocks from the PRISM Emerging NextGen Tech index to keep an eye on:

BigBear.ai:

BigBear.ai specializes in decision intelligence solutions powered by algorithms, serving a wide range of clients including the U.S. intelligence community and sectors such as health care and manufacturing. A notable collaboration with Amazon Web Services enhanced BigBear’s AI capabilities in supply chains and logistics. Despite a recent revenue dip due to winding down certain programs and Virgin Orbit’s bankruptcy, BigBear.ai has shown impressive financial resilience. The company successfully reduced expenses, leading to its first net income positive quarter since going public.

Rekor Systems:

Rekor Systems is a company that specializes in providing advanced vehicle recognition systems and solutions. They leverage artificial intelligence (AI) and machine learning technologies to develop software and hardware solutions for license plate and vehicle recognition and other related applications. Rekor has secured three significant public safety contracts totaling to $3M in addition to a five year traffic counting contract with Gwinnett, Georgia’s Transportation Department.

Lantern Pharma:

Lantern Pharmaceuticals is a biotechnology company focused on the discovery and development of precision oncology therapeutics. They utilize a proprietary artificial intelligence (AI)-driven platform to identify and advance novel drug candidates with the potential to target specific genetic and molecular alterations associated with cancer. The FDA has granted Lantern Pharma with orphan drug designation for its drug candidate LP-284 in high-grade B-cell lymphomas (HGBL) and provided its recent financial results citing a productive and efficient third quarter.

While the excitement in the AI sector currently revolves around big names and big companies, small caps may offer big promise and potential for investors in next-gen tech.

The PRISM Emerging NextGen Tech index covers the latest advances in AI, Web 3.0, metaverse and blockchain. Visit https://prismmarketview.com/index/prism-emerging-nextgen-tech/ to learn more.

About PRISM MarketView:

Established in 2020, PRISM MarketView is dedicated to the monitoring and analysis of small cap stocks in burgeoning sectors. We deliver up-to-the-minute financial market news, provide comprehensive investor tools and foster a dynamic investor community. Central to our offerings are proprietary indexes that observe emerging sectors, including biotech, clean energy, next-generation tech, medical devices and beyond. Visit us at prismmarketview.com and follow us on Twitter.

PRISM MarketView does not provide investment advice.

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