3 Penny Stocks That AI Is Loving in July

Stocks to buy

Are you on the hunt for the next big investment opportunity? For this month, I used ChatGPT with the Webpilot extension to find the best July penny stocks to buy. AI can be an excellent tool for sorting thru the trash, and I think I found some potential winners here.

These companies were recommended as July penny stocks for the high potential returns. Each company also has a unique value catalyst that could be unlocked. If you can balance the risk to reward with these companies, they may be valuable additions to your portfolio.

So stay tuned as we uncover the best July penny stocks that may deliver great returns.

Applied Digital Corporation (APLD)

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Source: carlos castilla/Shutterstock

Applied Digital Corporation (NASDAQ:APLD) is one of those July penny stocks worth considering. It develops and operates data centers in the U.S.

Here’s what ChatGPT had to say about it.

“The company has been showing promising growth, with a sequential revenue growth of 78% reported in the fiscal second quarter of 2023. Despite a financial year loss, the company’s recent performance in the stock market has been strong, with shares closing at $8.44, marking a +1.81% move from the previous day. This suggests that Applied Digital Corporation could be a potential investment opportunity for those interested in the tech sector.”

This penny stock is indeed an excellent momentum play. It’s up 320% year to date and 264% over the past year. Analysts think there’s more upside to be had, too, since its price target is $13.50.

The rally for APLD stock comes amid securing a major $460 million contract last month, as reported by The Motley Fool. Revenue will be realized over three years for its AI cloud service platform, which significantly boosted its valuation and future expectations.

SoundHound AI (SOUN)

A sign for SoundHound AI (SOUN) out front of an office building.

Source: Tada Images / Shutterstock.com

SoundHound AI (NASDAQ:SOUN) is another great pick. It operates an advanced voice AI platform with a range of applications. Notably, it allows users to talk to it, much like Alexa or Siri, and then delivers the user’s results. It has some practical uses in call centers and customer service.

ChatGPT weighed in with the following:

“The company is expected to be a significant player in the automotive AI space, which could translate into meaningful profits. Despite a surprise in Q4 earnings that led to a slide in stock prices, the company has shown strong revenue growth and has secured new financing to strengthen its balance sheet. SoundHound AI also projects profitability within 2023 based on strong expected revenue growth and targeted cost reductions. This suggests that SoundHound AI could be a promising investment for those interested in the AI and voice technology sector.”

Investors should be aware of one caveat to its success. According to the Motley Fool, the company operates with negative operating profits and cash flows, often relying on dilutive stock offerings for funding. Still, it’s another great momentum play for anyone interested in AI penny stocks.

WeTrade Group (WETG)

A concept image of a person holding a phone with various icons representing software-as-a-service companies.

Source: TierneyMJ / Shutterstock.com

WeTrade Group (NASDAQ:WETG) is a SaaS stock providing technical support and digital transformation tools for enterprises across different industries.

ChatGPT said:

“WeTrade Group has recently entered into a $120M technical agency agreement with Vmade Tech for launching the operation of the company’s WTPay platform. This move could potentially lead to significant growth for the company. However, it’s worth noting that WeTrade Group has been notified of non-compliance with Nasdaq’s requirements for continued listing due to failure to meet certain criteria. This suggests that while there could be potential for growth, significant risks are also involved. As always, potential investors should conduct their own thorough research and consider their risk tolerance before making any investment decisions.”

The potential delisting comes amid the company unable to file its annual report form 10-K for December 2022 “without unreasonable effort or expense”.

Another risk factor is that its revenue dropped 19% year over year and reported a net loss of 277% from the same period. This makes WETG stock particularly risky, but there could still be some upside if it manages to turn its fortunes around.

On the date of publication, Matthew Farley did not have (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.