7 Most Popular AI Penny Stocks Under $5 To Avoid

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1. Unisys Corporation (NYSE:UIS)

Share Price as of June 21: $4.15

Year-to-Date Returns as of June 21: -34.44%

Number of Hedge Fund Holders: 23

Unisys Corporation (NYSE:UIS) is one of the 7 most popular AI penny stocks under $5 to avoid is Unisys Corporation (NYSE: UIS). On June 16, Unisys announced the pricing of its previously announced private offering of $700 million aggregate principal amount of Senior Secured Notes due 2031. This is a private offering extended to persons reasonably believed to be qualified institutional buyers.

According to Unisys, the notes will be issued at par and carry an annual interest rate of 10.625%. The interest is payable semi-annually on January 15 and July 15, starting from January 15, 2026. The offering is anticipated to close on June 27, 2025, subject to customary closing conditions.

Unisys intends to use the net proceeds from this offering to finance a cash tender offer and consent solicitation for all of its existing notes worth $485 million. The notes are due November 1, 2027. The proceeds will also cover related premiums, fees, and expenses, while another portion is earmarked to partially fund the company’s U.S. pension plan deficit and postretirement liabilities. The remaining funds, if any, will be used for general corporate purposes.

Unisys Corporation (NYSE:UIS) is an information technology company that provides digital workplace, cloud, and enterprise computing solutions. It operates through three segments: Digital Workplace Solutions (DWS), Cloud, Applications & Infrastructure (CA&I), and Enterprise Computing Solutions (ECS). Its offerings include IT support services, cloud migration, cybersecurity, and ClearPath Forward.

While we acknowledge the potential of UIS as an investment, 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 UIS and that has 100x upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.

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