5 Best Small Cap AI Stocks to Invest In

In this article, we discuss the 5 best small cap AI stocks to invest in. If you want to read about some more small cap AI stocks, go directly to 11 Best Small Cap Ai Stocks to Invest In.

5. Cognex Corporation (NASDAQ:CGNX)

Number of Hedge Fund Holders: 30

Cognex Corporation (NASDAQ:CGNX) creates, develops, produces, and distributes a wide range of image-based devices, all of which employ artificial intelligence (AI) methodologies to make choices that are equal to those of people based on what they perceive. Since the company’s establishment in 1981, Cognex Corporation (NASDAQ:CGNX) has sold about 3 million image-based devices, totalling over $9 billion in sales.

Cognex Corporation (NASDAQ:CGNX) acquired German lighting technology innovator SAC Sirius Advanced Cybernetics. The acquisition will give Cognex Corporation (NASDAQ:CGNX) access to cutting-edge computational lighting technology.

Cognex Corporation (NASDAQ:CGNX)‘s P/E ratio of 39.1x is higher than the 16.11x average of its competitors. This means that the stock is trading higher than the electronic sector average. Cognex Corporation (NASDAQ:CGNX) earned $177 million in operating cash flow in the first nine months of 2022. In addition, the company anticipates revenue of $235 million to $255 million in the fourth quarter. 

Artisan Partners mentioned Cognex Corporation (NASDAQ:CGNX) in its Q2 2022 investor letter. Here is what the fund said:

“Cognex Corporation (NASDAQ:CGNX) is a leading manufacturer of machine vision systems used to automate/improve processes in manufacturing and logistics. The company has achieved solid growth and profitability over its history, but we suspect slowing growth in key end markets such as consumer electronics and e-commerce distribution may lead to demand weakness for its products in the near term. In addition, inflation is pressuring the company’s gross margins. Thus, we exited our position in favor of other alternatives.”