Small- and mid-cap artificial intelligence (AI) stocks have seen significant gains this week due to new economic data that led to falling Treasury yields. Several company-specific events, such as securing new business, analyst upgrades, and new product launches, also contributed to the surge.
BigBear.ai Holdings (NYSE: BBAI), a decision-making AI company, announced a major contract win from the Department of Defense Chief Digital and Artificial Intelligence Office (CDAO). The company will further develop its Virtual Anticipation Network (VANE) prototype to help the government evaluate news media origins in non-allied countries. This award was well received by analysts, with Cantor Fitzgerald significantly increasing its price target from $3.50 to $8.
Another AI stock, AST SpaceMobile (NASDAQ: ASTS), saw its shares soar as the Federal Communications Commission gave it the green light to try out its satellite connection services for voice, apps, video, and data roaming. The company designed satellites intended for space-based cellular broadband, potentially allowing cellphones to connect in dead areas.
SoundHound AI (NASDAQ: SOUN) also benefited from broader market conditions, with new customizations for its chat voice assistant that will enable automakers to have more control over their AI voice assistants.
While these companies are highly innovative and have the potential to disrupt their respective markets, they are not yet profitable and have risen to multibillion-dollar valuations. Investors should exercise caution and consider taking a small, speculative position before investing in these stocks.
Source: https://www.nasdaq.com/articles/why-bigbearai-soundhound-ai-and-ast-spacemobile-shares-all-popped-week