3 Small Cap Stocks for 2025 News ad

Among companies looking to adopt AI and investors looking for a way to profit from the trend, promising AI firms continue to emerge. Below, I’ll detail three small-cap AI stocks to watch in 2025. Two of them had excellent 2024 and look to continue their strong results. The other is a run-down company that will soon bring its product to market with plans to generate $100 million in recurring revenue. All returns and estimated growth potential are based on closing prices on December 17th.

Airship Artificial Intelligence: Shares are rising and analysts still see nearly triple upside potential

Airship AI NASDAQ: AISP The stock is expected to rise 86% in 2024. The airship’s AI analyzes unstructured data and formats it. A good example is traffic video analysis. The company’s hardware and software can analyze video from surveillance cameras.

They can record the make, model, color and license plate of the vehicle that committed the traffic violation.

It then organizes the information into a format that a spreadsheet or database can record.

Shares of the Redmond, Washington-based company have risen this year as it has consistently won government contracts. The agencies he works with include the U.S. Department of Homeland Security, the Department of Justice and the Chicago Police Department.

The company’s revenue over the past 12 months grew 148% compared to the previous quarter, and the firm has made significant progress in improving its profitability. Free cash flow is expected to be positive this year. If the company can close a significant portion of its $130 million portfolio, the stock could just begin its climb higher. This pipeline represents five times its total revenue over the last 12 months. The average of price targets from Benchmark and Roth MKM suggests the stock could rise 185%.

BigBear.ai: Increasing military draft and decreasing military recruitment provide great potential

BigBear.ai New York Stock Exchange: BBAI is another small stock doing well in 2024, with shares up 59%. BigBear provides artificial intelligence-based analytics and intelligence solutions. The company targets three markets: national security, supply chain management and digital identity.

The company has seen particularly strong stock gains since October after it received a five-year contract with the US Army.

The $165 million contract aims to make the Army a more data-driven fighting force.

A tailwind for BigBear.ai was the reduction in military recruitment. From 1980 to 2020, military conscription fell by 59%. However, the situation appears to be on the mend, with hiring set to increase in FY2024. However, this is a clear downward trend. This requires the military to use more advanced technology to get the job done with fewer people.

The company also attracts non-military customers. The company recently completed installation of biometric verification technology at Denver International Airport. This follows the company’s announcement that it has entered into a master services agreement with London Heathrow Airport, Europe’s largest airport. Overall, BigBear.ai is showing significant progress, with military departments and other prominent organizations collaborating with the firm. Recent price targets from Cantor Fitzgerald and HC Wainwright imply the company’s shares are priced close to fair value. However, this could change if new announcements cause these stocks to change their ratings.

Rezolve AI: Tech Giants Help Sell Gen-AI’s E-Commerce Solution

AI decides NASDAQ: RZLV In 2024, its shares fell sharply by 69%. The company helps e-commerce platforms and merchants use Gen AI to improve customer engagement.

It uses a customizable, large e-commerce language model to make it easier for customers to find the products they want.

Its platform allows for a conversational experience where customers can enter a specific description of the product they want and receive recommendations.

It can also recommend related products that can help e-commerce platforms increase revenue. The reason for the excitement surrounding this company is that it plans to commercialize its platform in the fourth quarter of 2024 in Europe and the first quarter of 2025 in North America.

Rezolve also recently announced an agreement with Alphabet. NASDAQ: GOOGLEparent company of Google and Microsoft NASDAQ: MSFT. The firms will help Rezolve distribute its platform to customers through the two tech giants’ cloud computing infrastructure. The company expects annual recurring revenue to be $100 million by the end of 2025, compared to no revenue currently. If the company can deliver on that promise, Rezolve AI stock could have an incredible year. The average of Wall Street’s current price targets suggests a 37% upside potential for the stock.

Before considering airship AI, you should hear this.

MarketBeat tracks Wall Street’s top-rated and best-performing analysts daily and the stocks they recommend to their clients. MarketBeat identified five stocks that top analysts are quietly whispering to their clients to buy now, before the broader market takes hold… and Airship AI wasn’t on the list.

While Airship AI currently has a Buy rating among analysts, the top-rated analysts rate these five stocks as Outperform Buys.

View five stocks here

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