In this article, we will take a look at the 11 ChatGPT penny stock picks. To see more such companies, go directly to 5 ChatGPT Penny Stock Picks.
The AI boom that started with the launch of ChatGPT from OpenAI seems to have no end in sight. A McKinsey report compared the fickle rise of AlphaGo, an AI program made by DeepMind that famously beat the top Go player, with the rise of generative AI applications of today. While AlphaGo made a lot of headlines, its popularity faded quickly. But come the end of 2022, the launch of ChatGPT heralded an era of AI popularity that remains far from being fickle. In fact the AI trend is promising to change the nature of jobs and human productivity. The McKinsey report said that generative AI applications like ChatGPT, GitHub Copilot, Stable Diffusion, among others, were able to capture the imagination and attention of the masses because of their broad utility. The latest generative AI wave has something to offer for everyone – students, software developers, professors, researchers, hedge funds, etc.
With apps like ChatGPT, people are now seeing the true power of generative AI and how it can increase productivity of humans and businesses. And analysts believe we are now reaching beyond the hype/no hype debate in the AI domain. While questions could be raised on tech stock valuations, there’s hardly anyone who can doubt that the AI tools rolled out by companies are creating actual benefits for humans and increasing their productivity.
A report by Goldman Sachs quotes GS US software analyst Kash Rangan, who said that generative AI tools have started to enhance the productivity of workers. He said that software developers’ productivity has increased by about 15% to 20% due to generative AI tools.
The report also quoted Goldman Sachs' TMT sector specialist Peter Callahan, who said that the generative AI technology has the potential to transform “almost all aspects of the enterprise and consumer experience.”
The Goldman Sachs report further quantifies the benefits of generative AI. The report quotes Joseph Briggs, an economist at Goldman Sachs, whose estimates suggest that the generative AI potential could raise annual labor productivity growth by around 1.5pp over a 10-year period following widespread adoption in the US and other DM economies, and eventually raise annual global GDP by 7%.
There has been a lot of talk about how the AI-led market boom has created a huge euphoria in the market and pushed tech stock valuations to unprecedented levels. Goldman Sachs’ analysts think otherwise and believe there are still huge investment and growth opportunities in AI stocks:
“GS US internet analyst Eric Sheridan, for his part, is somewhat comforted by the fact that the vast majority of companies that have recently outperformed on the AI theme are still trading at relatively reasonable multiples to GAAP EPS. And Rangan makes the case that unlike other large technology cycles—such as the shift from distributed systems to cloud computing— where objections from established players slowed adoption, the most powerful technology companies in the world are driving this shift, so AI probably isn’t in a hype cycle. So where are the most compelling AI investing opportunities today? Rangan and Sheridan argue that the large tech companies developing the foundational AI models, as well as the “picks and shovels” businesses serving the space— semiconductor companies, cloud computing hyperscalers, and infrastructure companies—are well positioned to capture gains during the current “build” phase. Guo agrees, but also sees opportunities across the stack, and is most excited about the application layer that the broader investor base seems less sure about today."
AI Innovation: What's Next?
A report by Deutsche Bank uses an interesting approach to foresee what’s going to happen in the industry when it comes to AI innovation. Researchers at the bank processed thousands of AI-related patents from 2012 through 2022 to see what kind of AI technologies could make a drastic impact in the industry in the near future. The report said that the number of venture capital deals multiplied over ten times over the past decade and the value of deals in 2022 was almost 50 times higher than in 2012, at $83 billion. The report said that most of the AI-related innovation is expected in transportation, industrial and consumer uses. The report also predicts the arrival of generative audio by 2024.
“Nearly four-fifths of AI-related VC deals made over the past decade have been in sectoral applications. A further 8% occurred in autonomous machines and vehicles, and the remaining 13% in the semiconductor space. The proportion for AI-related patents is similar. Just under two-thirds of patents in our database have been published under the umbrella of sectoral applications. A further 19% of patents were for technology solutions stretching horizontally across sectors, such as developer tools and computer vision; 16% for autonomous machines and vehicles; and the last 4% for semiconductors.”
Using AI for Stock Picking?
It’s always fun to test generative AI capabilities when it comes to stock picking. Algo trading and AI-based quant technologies are being used by experts for stock picking for several years. But for this article we decided to probe ChatGPT to list some penny stocks it believes are good. But it’s not easy to get answers from ChatGPT on this topic.
We asked ChatGPT to act like a professional and expert stock picker and list at least 15 penny stocks that it believes have a chance of gaining value as of its cut-off data. As expected, ChatGPT started its response with several disclaimers and warnings that it is not a stock adviser and we should contact professional stock-picking professionals. It also said that investing in penny stocks is risky since these stocks are “inherently volatile.” Nonetheless ChatGPT mentioned some penny stocks by saying that these stocks “were showing some potential as of my last update.”
Entertainment company Cinedigm Corp. (NASDAQ:CIDM) shares have been devastated this year, losing over 80% in value through the end of August. Cinedigm Corp. (NASDAQ:CIDM) recently posted fiscal first-quarter results. FQ1 GAAP EPS came in at -$0.37 missing estimates by $0.31. Revenue in the quarter came in at $13 million, beating estimates by $0.33 million. Cinedigm Corp. (NASDAQ:CIDM) reiterated its guidance for fiscal 2024.
10. Liquid Media Group Ltd. (OTC:YVRLF)
Number of Hedge Fund Holders: N/A
Liquid Media Group Ltd. (OTC:YVRLF) provides intellectual property and other solutions for content creators. Liquid Media Group Ltd. (OTC:YVRLF) was not a strong pick from ChatGPT as it’s currently down about 96% over the past one year. Liquid Media Group Ltd. (OTC:YVRLF) recently received a delisting notice from the Nasdaq. In May Liquid Media Group Ltd. (OTC:YVRLF) also received a notice of default from an institutional investor. The investor claims Liquid Media Group Ltd. (OTC:YVRLF) breached the securities purchase agreement by failing to timely file its Form 20-F for the year ended November 30, 2022, with the SEC.
Veterinary diagnostic and pharmaceutical company Zomedica Pharmaceuticals Corp. (NYSE:ZOM) ranks 9th in our list of the penny stocks picked by ChatGPT. Zomedica Pharmaceuticals Corp. (NYSE:ZOM) has gained about 14% year to date through August 30. Earlier in August the company posted second quarter results. Revenue of the company in the period jumped about 43.3% year over year to $6.02 million.
Insider Monkey’s database of hedge funds shows that 2 hedge funds had stakes in Zomedica Pharmaceuticals Corp. (NYSE:ZOM) as of the end of the second quarter of 2023.
Cannabis company Sundial Growers Inc. (NASDAQ:SNDL) is one of the penny stocks which ChatGPT thinks have potential. Sundial Growers Inc. (NASDAQ:SNDL) changed its name to SNDL back in July 2022. Earlier in August SNDL posted second quarter results. Net loss in the quarter came in at C$33.2 million, compared to a net loss of C$74.0 million posted in the second quarter of last year. Revenue in the quarter jumped about $9.3% year over year. SNDL’s cannabis retail segment revenue increased by 13.2% year over year in the quarter.
As of the end of the second quarter of 2023, 2 hedge funds in Insider Monkey’s database had stakes in SNDL.
Ceramic materials company Sintx Technologies, Inc. (NASDAQ:SINT) shares were up about 3% over the past five days through August 30. Sintx Technologies, Inc. (NASDAQ:SINT) fell heavily in February after the company priced its public offering of 2.15 million units.
As of the end of the second quarter of 2023, 2 hedge funds had stakes in Sintx Technologies, Inc. (NASDAQ:SINT).
Healthcare solutions company Precipio, Inc. (NASDAQ:PRPO) is another penny stock that does not seem like a good pick by ChatGPT. Precipio, Inc. (NASDAQ:PRPO) shares have lost about 70% over the past one year. Precipio, Inc. (NASDAQ:PRPO) announced in June that it has reduced its cash burn by $1.7 million via several efficiency measures.
