Everyone’s current favorite antagonist, Federal Reserve Chair Jerome Powell, might be turning the tide with his latest comment on the economy. In a recent address, He stated, “I don’t see the ‘stag’ or the ‘flation’,” dispelling concerns about a 1970s-like stagflation. Hence, an economic recovery is well within sight, which bodes well for undervalued AI penny stocks.

AI stocks have been panned in recent weeks after taking the stock market to record highs last year. However, few, if any, can take away the AI industry’s disruptive long-term potential. As I’ve mentioned multiple times in my articles of late, we’re still in the early stages of what promises to be a long and illustrious era for AI.

The Magnificent Seven hogged the spotlight last year, overshadowing the impressive strides made by undervalued AI penny stocks. Here are three that impress the most but caution is advised considering the speculative nature of these investments.

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Guardforce AI (GFAI)

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Guardforce AI (NASDAQ:GFAI) is an interesting AI penny stock, which leverages disruptive technology to deliver robust robotics-based security solutions. This unique focus on robotics-based security positions it ahead of its competition and as a frontrunner in the field.

Moreover, its recent quarterly performances show healthy single-digit revenue growth, while comfortably beating analyst estimates. Additionally, its free cash flow balance stands at an impressive $11 million as of last year, 148% higher than the prior-year period.

Furthermore, the firm is moving forward with strategic partnerships and acquisitions to further strengthen its positioning. It recently bought out robot-related business assets from Shenzhen Kewei Robot Technology which could significantly enhance GFAI’s Robot-as-a-Service (RaaS) sales and capabilities. Also, its collaboration with Concorde Security in Singapore is another feather in its proverbial cap. Concorde expects GFAI’s robotic security solutions to effectively manage visitors while performing routine tasks such as janitorial duties.  Despite the positives GFAI stock hasn’t struck a chord with investors yet, but offers superb long-term potential.

Inuvo (INUV)

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Why spend 30 cents on a gumball when you could pick up Inuvo (NYSEAMERICAN:INUV) stock and chew on even bigger returns?

It wasn’t like that for communication services firm Inuvo, though. It traded 99.5% lower than its all-time high price of $60.80. INUV stock has fallen out of favor with investors for a while, having shed more than 50% of its value in the past decade.