We recently published a list of 12 Cheap AI Stocks to Buy in 2025. In this article, we are going to take a look at where Evolv Technologies Holdings, Inc. (NASDAQ:EVLV) stands against other cheap AI stocks to buy in 2025.
Artificial Intelligence (AI) was a buzzword around Wall Street for most of 2024. AI has shown immense promise but comes with significant risks. Big AI players are dominating the broader market, but there will be opportunities for other companies to explore as the AI market continues to expand. For instance, the new administration is keen on technological advancement, and recently, President Donald Trump announced a $500 billion AI initiative, a joint venture known as Stargate between OpenAI, Softbank, and Oracle.
However, DeepSeek’s introduction shocked the U.S. companies after it released a new AI model, a much better alternative to GPT-4. DeepSeek claims to have designed the AI model in just two months and at around under $6 million using Nvidia’s less-advanced H800 chips, as reported by Reuters on January 27. Since the news broke out, NVIDIA Corporation (NASDAQ:NVDA) shares have plunged over 16%, wiping away $600 billion in market capitalization, the biggest one-day loss in U.S. history.
Moor Insights & Strategy founder, CEO, and chief analyst Patrick Moorhead, speaking to Market Domination, shared his views on DeepSeek. Moorhead was impressed by the efficiency of DeepSeek’s AI. He pointed out that the Chinese have used different techniques compared to American developers, where they were able to parse or train maybe 5% of the data, which is a 95% reduction.
However, Moorhead also addressed the U.S. market drop as an “overreaction.” “I think the market overall should be going crazy because [this is the] uplift of what we were looking for [from AI],” said Moorhead. He added that the investors’ focus should be on the progress in inference.
It might be a good time to invest in AI stocks, especially cheap AI stocks during the market’s overreaction.
Our Methodology
To determine the list of cheap AI stocks, we went through various news articles and stock analyses. We shortlisted the AI stocks with the minimum analyst upside of 30%, as of January 27. Cheap, in the context of this article, means stocks that Wall Street analysts believe are undervalued and will surge to higher share prices. We have ranked the cheap AI stocks to buy based on their popularity among hedge funds, as of Q3 2024, in ascending order.
Why do we care about what hedge funds do? 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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A security team patrolling a public building with their advanced Evolv systems.
Evolv Technologies Holdings, Inc. (NASDAQ:EVLV)
Analyst Upside (as of January 27): 37.16%
No. of Hedge Fund Holders: 18
Evolv Technologies Holdings, Inc. (NASDAQ:EVLV) provides AI-driven touchless security screening systems. The company’s products use advanced sensors and cloud services to uncover high-risk weapons while ignoring harmless objects. The company is based on a multi-year security-as-a-service subscription model, providing predictable revenue and growth opportunities. The company sells its products across diverse sectors including education, healthcare, and entertainment venues.
On January 24, Craig-Hallum increased its price target on EVLV from $5.75 to $6.75 and kept a Buy rating on the shares. The analyst raised the price target after the company issued an unequivocally positive business update in Q4 2024. During the fourth quarter of 2024, the company deployed over 6,000 Evolv Express units internationally, with 470 new multi-year subscriptions activated. The company also added nearly 60 new customers across various industries. The company continues to expand as the demand for its products remains stable. Evolv Technologies Holdings introduced a new AI-based weapons detection solution for bags, Evolv eXpedite, which booked its first orders in Q4.
Analysts pointed out that the higher-than-expected unit deployments should calm investors about the company’s financial restatements and regulatory scrutiny of its operations. To add to this, Evolv Technologies Holdings, Inc. (NASDAQ:EVLV) reported that not a single customer has unsubscribed their service following the FTC settlement. This development is considered an endorsement of customer satisfaction with the company’s offerings.
Evolv Technologies Holdings (NASDAQ:EVLV) ended the fourth quarter of 2024 with zero debt and almost $52 million in cash and cash equivalents, further strengthening the firm’s balance sheet.
Overall, EVLV ranks 10th on our list of cheap AI stocks to buy in 2025. While we acknowledge the potential of EVLV to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than EVLV but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
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