On December 13, Tim Seymour of Seymour Asset Management joined CNBC’s ‘The Exchange’ to discuss whether AI stocks will take a backseat in 2026. Seymour noted that the emergence of AI was fortunate, given that the market in 2022 didn’t look promising. He added that it is a positive sign that the rest of the market is now performing better as the AI trade stumbles. When questioned if the shift could be that easy, Seymour replied that the other 493 stocks (the S&P 500 excluding the top seven or similar group) are not only reaping some of the benefits of AI but are also demonstrating EPS growth and margin accretion, which contrasts with the debated margin degradation seen with companies like Broadcom today. He described the dynamic of rotation as great, but noted it is always relative to where you’re coming from. He suggested that institutional and retail investors are currently heavily overweight in AI and certain parts of the tech trade.
Discussing what happens if investors start to really panic or jump out of the AI trade, or if the current movement is simply profit-taking after a very good year, Seymour reminded investors of where we are coming from, referencing the massive move and substantial rally. He suggested the dynamic involves a large amount of money pushed into the trade that’s somewhere about three years out. He noted that the recent information (over the last couple of days) has raised questions about the future margin profile and the debt profile of customers, which has thrown a different light even on hyperscalers and the MAG7 that were previously free cash flow machines, but suddenly they may not be. This means that these stocks might trade at a different multiple.
That being said, we’re here with a list of the 10 AI stocks under $20 to buy now.
Our Methodology
We sifted through financial media reports and stock screeners to compile a list of top AI stocks under $20. We then selected 10 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q3 2025.
Note: All data was sourced on December 26.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
10 AI Stocks Under $20 to Buy Now
10. Veritone Inc. (NASDAQ:VERI)
Share Price as of December 26: $5.03
Number of Hedge Fund Holders: 11
Veritone Inc. (NASDAQ:VERI) is one of the AI stocks under $20 to buy now. On December 4, Veritone and Armada announced a partnership to integrate edge-based compute and sensing with enterprise-grade AI. The two companies aim to revolutionize data management for public-sector agencies and commercial content owners. The collaboration establishes the industry’s first fully integrated Edge-to-Enterprise Data Fabric to ingest high-volume audio, video, drone, and sensor streams and convert them into actionable intelligence in real time, even in disconnected or low-bandwidth environments.
The partnership combines the Armada Edge Platform/AEP, which includes Galleon modular data centers, with Veritone’s aiWARE AI operating system. This unified offering supports the entire lifecycle of mission-critical data, including capture, AI-powered analytics, secure dissemination, and long-term discovery. The collaboration provides a seamless pipeline from remote sensors to operational impact, specifically designed for the austere or high-velocity environments encountered in national security, public safety, and global live events.
Looking toward the future of data management, Veritone Inc. (NASDAQ:VERI) and Armada are exploring edge-based processing for data tokenization. This initiative aligns with the Veritone Data Refinery/VDR strategy, allowing organizations to convert audio and video inputs into AI-ready digital tokens. This approach enables commercial and federal entities to treat data as a renewable asset class for long-term discovery, training-data licensing, and operational reuse.
Veritone Inc. (NASDAQ:VERI), together with its subsidiaries, provides AI computing solutions and services in the US, the UK, France, Australia, Israel, and India.
9. Rezolve AI (NASDAQ:RZLV)
Share Price as of December 26: $2.85
Number of Hedge Fund Holders: 14
Rezolve AI (NASDAQ:RZLV) is one of the AI stocks under $20 to buy now. On December 24, Cantor Fitzgerald assumed coverage of Rezolve AI (NASDAQ:RZLV) with an Overweight rating and $8 price target. This sentiment was announced as the firm updated its research coverage in the Security & Infrastructure Software sector.
Additionally, on December 23, Rezolve AI announced a significant shift from pilot programs to live enterprise deployments across its global markets, including EMEA, APAC, LATAM, and North America. The company reported that its AI-driven platform is seeing increased demand as retailers move from traditional search models to conversational engagement.
In the MENA region, the UK-headquartered fashion platform VogaCloset transitioned to a fully live status with Rezolve AI’s Conversational Commerce following successful A/B testing. Serving over 250,000 products, the platform saw over 60% of shoppers using image uploads for product discovery and styling. VogaCloset plans to expand this technology to Product Detail Pages and is considering upgrading to the company’s mobile-first Concierge experience as a potential replacement for its current search stack.
Growth in the Indian market is highlighted by a new multi-year agreement with Snapdeal, one of the country’s top five online marketplaces. Snapdeal is currently live with Rezolve Multi-Search and is exploring AI-driven shop the look styling features. Additionally, AJIO, the flagship fashion platform of Reliance Retail with more than $2.5 billion in annual eCommerce sales, has renewed and expanded its partnership to include more premium brand capabilities.
In Latin America, Rezolve has launched live production deployments for GAP and Banana Republic in Mexico. These multilingual systems handle search, enrichment, and SEO at an enterprise scale. The company also continues to grow its relationship with Liverpool, a major regional department store group. Strategic partnerships with regional hyperscalers in LATAM are further driving commercial discussions by providing live evaluations against incumbent technologies.
Rezolve AI (NASDAQ:RZLV) provides generative AI solutions for the retail and e-commerce sectors in the UK and the US.
8. Cerence Inc. (NASDAQ:CRNC)
Share Price as of December 26: $11.05
Number of Hedge Fund Holders: 15
Cerence Inc. (NASDAQ:CRNC) is one of the AI stocks under $20 to buy now. On December 11, Cerence announced the expansion of its AI ecosystem with the launch of two new domain-specific AI agents: the dealer assist agent and the ownership companion agent. These solutions mark a shift for Cerence AI as it moves beyond in-vehicle experiences to address challenges across the broader automotive ecosystem. Both agents are scheduled to make their official debut at CES 2026 in Las Vegas.
The dealer assist agent is designed to bridge the gap between customer expectations and dealership operational limits. Highlighting current industry inefficiencies, Cerence Inc. (NASDAQ:CRNC) noted that nearly half of online leads go unanswered for 24 hours, despite data showing that leads contacted within an hour are 7x more likely to qualify. Furthermore, dealerships typically lose 15% to 20% of potential monthly sales due to unresponsiveness after hours. This new agent automates lead capture, test drive bookings, and service scheduling while integrating directly with CRM and Dealer Management Systems/DMS to ensure a seamless handoff to human staff for high-value interactions.
The ownership companion agent focuses on the driver’s post-purchase journey, providing an always-on service companion inside the vehicle. This agent addresses the fact that over 60% of car owners do not currently use the advanced features in their vehicles. It helps drivers diagnose mechanical issues, interpret dashboard alerts, and book service appointments instantly. The agent also recognizes individual driver history to surface trade-in or upgrade opportunities, allowing OEMs to maintain proactive brand loyalty long after the initial sale. Together, these two agents create an AI-powered service loop that facilitates real-time, context-aware handoffs between the vehicle and the dealership.
Cerence Inc. (NASDAQ:CRNC) provides AI-powered assistants for the mobility/transportation market in the US, the rest of the Americas, Germany, the rest of Europe, the Middle East, Africa, Japan, and the rest of the Asia-Pacific.
7. WhiteFiber Inc. (NASDAQ:WYFI)
Share Price as of December 26: $16.61
Number of Hedge Fund Holders: 18
WhiteFiber Inc. (NASDAQ:WYFI) is one of the AI stocks under $20 to buy now. On December 18, WhiteFiber, through its subsidiary Enovum Data Centers Corp., finalized a landmark 10-year colocation agreement with Nscale Global Holdings. The partnership centers on the first 40 MW delivery of critical IT load at WhiteFiber’s flagship NC-1 data center campus located in Madison, North Carolina. The contract carries a total value of ~$865 million, which includes non-recurring installation services and 3% annual rate escalators, though it excludes pass-through costs such as electricity and property taxes.
The agreement is structured as a modified gross colocation lease and will be deployed in two distinct 20 MW phases. Billing for the initial phase is targeted to begin on April 30, 2026, with the second phase following on May 30, 2026. Nscale intends to use this capacity to power the AI infrastructure for major investment-grade technology customers worldwide. As part of the deal, Nscale will also receive priority notification for any future capacity that becomes available at the NC-1 site.
The NC-1 campus is a one-million-square-foot facility situated on 96 acres of a former industrial site. It is engineered to a Tier 3-equivalent standard, supporting ultra-high-density environments of up to 150 kW per cabinet with N+1 cooling and redundant power distribution. WhiteFiber Inc. (NASDAQ:WYFI) has already invested $150 million in equity into the project to de-risk future financing.
To support the construction requirements of NC-1 and broader growth, WhiteFiber Inc. (NASDAQ:WYFI) is in advanced discussions for institutional financing. The company expects to formalize a credit facility in early Q1 2026 that may include an accordion structure for additional capital.
WhiteFiber Inc. (NASDAQ:WYFI) designs, develops, and operates data centers and provides AI infrastructure solutions. The company offers hosting, colocation, and cloud-based HPC GPU services.
6. Recursion Pharmaceuticals Inc. (NASDAQ:RXRX)
Share Price as of December 26: $4.25
Number of Hedge Fund Holders: 19
Recursion Pharmaceuticals Inc. (NASDAQ:RXRX) is one of the AI stocks under $20 to buy now. On December 8, Recursion Pharmaceuticals announced positive Phase 1b/2 results from its ongoing TUPELO trial evaluating REC-4881, which is a first-in-class allosteric MEK1/2 inhibitor for Familial Adenomatous Polyposis/FAP. FAP is a hereditary condition affecting over 50,000 people in the US and EU5, characterized by a near 100% lifetime risk of colorectal cancer due to APC gene mutations.
The trial showed that REC-4881 achieved rapid clinical activity and significant durability of effect after treatment cessation. The findings suggested that REC-4881 not only shrinks existing polyps but may provide a sustained therapeutic benefit that halts the typically relentless progression of the disease. REC-4881 was discovered using the Recursion OS, which used AI-driven cellular phenomics to identify MEK1/2 inhibition as a rescue mechanism for APC loss-of-function. Originally evaluated by Takeda for solid tumors, the drug was in-licensed by Recursion Pharmaceuticals Inc. (NASDAQ:RXRX) specifically for FAP based on these AI insights.
The safety profile observed in the TUPELO trial remains consistent with the known effects of MEK inhibition. While 94.7% of the 19 safety-evaluable patients reported a treatment-related adverse event, most commonly skin rash or increased blood CPK, the majority were Grade 1 or 2. Only 15.8% experienced Grade 3 events, and there have been no Grade 4 or 5 TRAEs reported to date. Recursion Pharmaceuticals Inc. (NASDAQ:RXRX) now intends to engage with the FDA in H1 2026 to define a potential registration pathway for the drug. The company is also expanding the trial’s eligibility criteria, lowering the minimum age from 55 to 18 years old, to address the younger population most severely impacted by FAP-related surgeries.
Recursion Pharmaceuticals Inc. (NASDAQ:RXRX) operates as a clinical-stage biotech company that decodes biology and chemistry by integrating technological innovations across biology, chemistry, automation, data science, and engineering to industrialize drug discovery in the US. The company has replaced human-led hypothesis testing with an AI-integrated operating system.
5. Stagwell Inc. (NASDAQ:STGW)
Share Price as of December 26: $4.98
Number of Hedge Fund Holders: 21
Stagwell Inc. (NASDAQ:STGW) is one of the AI stocks under $20 to buy now. On December 10, Stagwell announced the launch of NewVoices.ai, which is an enterprise-grade platform designed to manage sales, customer support, and retention through advanced adaptive AI. The platform functions as a lifelike, independent agent that provides 24/7 instant responses globally in any language. Unlike traditional chatbots, NewVoices.ai is built as a one-to-one intelligence layer that engages in high-level, information-based sales conversations, capable of driving conversions at a scale intended to exceed current human-led sales workflows.
The platform’s strength lies in its adaptive intelligence, which allows it to personalize every interaction by learning from a user’s specific history, goals, and preferences over time. NewVoices.ai integrates directly into existing enterprise technology stacks, delivering a tailored experience that evolves as it becomes more attuned to a customer’s individual style. It is designed for end-to-end revenue management, allowing organizations to either deploy ready-made solutions or build highly customized workflows.
As a managed service, NewVoices.ai combines these autonomous AI agents with specialized automation, analytics, and an operations layer to maintain human-level quality across global interactions. This launch follows Stagwell’s broader push into AI, which includes partnerships, like the collaboration with Google Cloud to use Gemini models, and other internal initiatives. By launching NewVoices.ai, Stagwell Inc. (NASDAQ:STGW) aims to provide enterprises with a scalable tool that fundamentally lowers the cost of business while increasing the inherent value of every customer interface.
Stagwell Inc. (NASDAQ:STGW) provides digital transformation, performance media & data, consumer insights & strategy, and creativity & communications services internationally. The company develops in-house software and related technology products, including AI-enabled communications.
4. Pony AI Inc. (NASDAQ:PONY)
Share Price as of December 26: $14.94
Number of Hedge Fund Holders: 27
Pony AI Inc. (NASDAQ:PONY) is one of the AI stocks under $20 to buy now. On December 17, Barclays analyst Jiong Shao initiated coverage of Pony AI with an Equal Weight rating and $15 price target. Although the firm expressed confidence that robotaxi technology is largely prepared for the Chinese market and possesses a viable commercial framework, it emphasized that industry hurdles remain. Ultimately, Barclays suggested that the primary value of the sector’s frontrunner lies in its foundational robotics and automation capabilities rather than the traditional ride-hailing service itself.
In its Q3 2025 earnings report, Pony AI Inc. (NASDAQ:PONY) disclosed a net loss of $61.6 million for the quarter, which was an increase from the $42.1 million loss in the same period last year. Pony AI reported a 90% year-over-year increase in robotaxi revenue, with a specific surge of 233% in fare-charging revenue during Q3. This growth was fueled by launching fully driverless commercial operations across Guangzhou, Shenzhen, Beijing, and Shanghai. Registered users more than doubled year-over-year, and operational efficiency improved significantly, with wait times reduced by ~50% compared to 2024. The company has also extended its global footprint to eight countries through partnerships with local transportation providers.
A major milestone for the quarter was achieving citywide unit economics break-even for the Gen 7 robotaxis in Guangzhou. In this market, daily net revenue per vehicle reached RMB299, averaging 23 orders per day. These figures account for hardware depreciation and operational costs, including charging and remote assistance. Pony AI is currently on track to reach a 1:30 remote assistance-to-vehicle ratio, which validates the scalability of their business model as they transition toward wider commercialization.
Pony AI Inc. (NASDAQ:PONY), through its subsidiaries, engages in the autonomous mobility business in the People’s Republic of China, the US, and internationally. The company develops a proprietary Virtual Driver that uses a unified AI software stack.
3. SentinelOne Inc. (NYSE:S)
Share Price as of December 26: $15.01
Number of Hedge Fund Holders: 42
SentinelOne Inc. (NYSE:S) is one of the AI stocks under $20 to buy now. On December 5, DA Davidson lowered the firm’s price target on SentinelOne to $16 from $19 and kept a Neutral rating on the shares. The firm highlighted that the company delivered a strong FQ3 2026 performance, with its $1.055 billion in annual recurring revenue surpassing the consensus estimate of $1.051 billion. DA Davidson noted that the stock is currently undervalued, but an upward shift in valuation is unlikely until there is clear evidence that growth has stabilized.
In the said third quarter, SentinelOne Inc. (NYSE:S) delivered $259 million in revenue, which represented a 23% year-over-year increase. Key growth indicators remained robust, with ARR climbing 23% to $1.055 billion and RPO surging 35% to reach $1.3 billion. International expansion was a major highlight, with revenue from outside the US growing 34% to account for 40% of the total business.
SentinelOne continues to use its Purple AI and Flex licensing models to drive platform consolidation. Purple AI has seen a rapid 40% attach rate among new licenses, while the Flex model is enabling larger, multi-solution deals by allowing customers to consume the Singularity platform more dynamically. During the quarter, the company closed the $225 million acquisition of Observo AI, adding a policy-driven data pipeline to its stack, and completed the acquisition of Prompt Security for $180 million.
For the full FY2026, SentinelOne Inc. (NYSE:S) expects total revenue of ~$1.001 billion, which would be a 22% year-over-year growth.
SentinelOne Inc. (NYSE:S) operates as a cybersecurity provider in the US and internationally. The company’s Singularity Platform delivers an AI-powered autonomous threat prevention, detection, and response capabilities across an organization’s endpoints, cloud workloads, and identity credentials.
2. UiPath Inc. (NYSE:PATH)
Share Price as of December 26: $16.84
Number of Hedge Fund Holders: 48
UiPath Inc. (NYSE:PATH) is one of the AI stocks under $20 to buy now. On December 9, Morgan Stanley analyst Sanjit Singh raised the firm’s price target on UiPath to $19 from $15 with an Equal Weight rating on the shares. This sentiment was posted after the firm adjusted estimates and valuations among its software coverage, which followed the company’s strong FQ3 2026 earnings report.
In FQ3, UiPath Inc. (NYSE:PATH) reached a historic milestone by reporting its first-ever GAAP profitable third quarter, with a GAAP operating income of $13 million. Total revenue grew 16% year-over-year to $411 million, exceeding the high end of its previous guidance. The company’s ARR reached $1.78 billion, which was an 11% increase from the prior year, supported by $59 million in net new ARR during the quarter. Customer retention remained high, with a dollar-based gross retention rate of 98% and a net retention rate of 107%.
UiPath continues to transition from traditional Robotic Process Automation/RPA toward an Agentic AI platform. The company highlighted new technology integrations with OpenAI, Microsoft, NVIDIA, Google, and Snowflake. A key development is the integration with Microsoft Azure AI Foundry and a new collaboration with OpenAI to build a ChatGPT connector for enterprise workflows. These initiatives are designed to help customers orchestrate complex multi-agent systems. Industry recognition supported this strategy, as Gartner named UiPath a leader in both Intelligent Document Processing and AI-augmented software testing.
For FQ4 2026, UiPath expects revenue to range between $462 and $467 million, despite an estimated $3 million headwind from currency fluctuations. ARR is projected to reach between $1.844 and $1.849 billion by January 31, 2026.
UiPath Inc. (NYSE:PATH) provides an end-to-end automation platform that offers a range of robotic process automation/RPA solutions primarily in the US, Romania, the UK, the Netherlands, and internationally. Its platform comes embedded with AI, ML, and NLP capabilities.
1. Snap Inc. (NYSE:SNAP)
Share Price as of December 26: $7.86
Number of Hedge Fund Holders: 50
Snap Inc. (NYSE:SNAP) is one of the AI stocks under $20 to buy now. On December 19, Guggenheim analyst Michael Morris lowered the price target on Snap to $8.50 from $9, while keeping a Neutral rating on the shares. Moving into 2026, Morris noted that investor sentiment is being dampened by anticipated obstacles to usage growth and core advertising performance that lags behind industry peers. Consequently, the firm reduced its daily active user projections for H1 2026, signaling a belief that these operational difficulties will remain a factor beyond the short term.
In Q3 2025, Snap achieved a significant milestone by reaching 477 million daily active users/DAUs, which was an 8% increase year-over-year, while monthly active users/MAUs grew 7% to 943 million. Total revenue for the quarter rose 10% to $1.51 billion, driven by a combination of a 5% increase in advertising revenue ($1.32 billion) and a massive 54% jump in Other Revenue ($190 million), which is primarily powered by the Snapchat+ subscription service. Snap Inc. (NYSE:SNAP) demonstrated a strong path toward sustained profitability by reducing its net loss by over 30%, bringing it down to $104 million from $153 million in the previous year.
Snapchat remains a dominant force in AR, with over 350 million daily users engaging with AR lenses. The platform’s creator ecosystem has now surpassed 400,000 developers who have built more than 4 million lenses. The company is also doubling down on GenAI; over 500 million users have interacted with Gen AI lenses, such as the popular AI Face Swap, more than 6 billion times. Additionally, Snap Inc. (NYSE:SNAP) announced Snap OS 2.0, which is a software foundation for its next-generation AR Spectacles, which are slated for a public debut in 2026.
Snap Inc. (NYSE:SNAP) operates as an international technology company. The company offers Snapchat, which is a visual messaging application with various tabs. The company integrates GenAI and ML across its platform for interactive ‘My AI’ chatbot experiences, real-time AR Lenses, and sophisticated ad-targeting tools.
While we acknowledge the potential of SNAP to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than SNAP and that has 100x upside potential, check out our report about this cheapest AI stock.
READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now.
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
