AI Small Caps With Real Revenue Growth Investors May Want To See
AI small caps are attracting fresh attention as investors look beyond large tech stocks and search for earlier stage opportunities tied to machine learning, automation, and data intelligence. With inflation, interest rates, and energy costs shaped by Middle East tensions and shifting policy across major economies, many readers are looking for targeted ways to back companies directly focused on AI progress. This AI Small Caps screener is designed to highlight smaller companies that are focused on AI and may have room to grow if their ideas scale. Below, you will see 3 of the most interesting stocks from this screener.
Butterfly Network (BFLY)
Overview: Butterfly Network is a medical technology company that sells handheld ultrasound devices and software, allowing clinicians to perform whole body imaging with a single probe connected to smartphones, tablets, or hospital systems, supported by AI tools that guide scanning and integrate results into clinical workflows.
Operations: Butterfly Network generates about US$102.9 million in revenue from its AI enhanced personal ultrasound solution, with roughly US$81.8 million from the United States and US$21.2 million from international markets.
Market Cap: US$1.75b
Butterfly Network stands out in the AI small caps space because it blends ultrasound hardware with AI driven software, such as Compass AI and ScanLab, to make imaging more accessible and easier to use at the bedside. The long term co development and licensing agreement with Midjourney, which includes upfront, annual, and milestone payments, highlights external interest in its ultrasound on chip technology. At the same time, the company is still loss making and relies on external funding, and recent insider selling will concern some investors. For readers, the key question is whether strong growth forecasts, international expansion, and a cash runway can outweigh valuation pressure and financing risk as this ultrasound platform matures.
Butterfly Network’s ultrasound on chip story is accelerating, yet the real tension sits between its cash needs, growth forecasts and international push. Get the full picture in the 1 key reward and 2 important warning signs (1 is major!)
SoundHound AI (SOUN)
Overview: SoundHound AI builds independent voice AI systems that let companies in sectors such as automotive, restaurants, customer service, and connected devices offer conversational assistants that can answer questions, take orders, and handle customer requests using natural speech.
Operations: SoundHound AI generates about US$184 million in revenue from Internet Software & Services, with around US$122.3 million from the United States and the remainder from other markets and segment adjustments.
Market Cap: US$2.73b
SoundHound AI sits at the center of the shift to conversational interfaces, with products like SoundHound Chat AI, OASYS, and Dynamic Drive-Thru giving enterprises tools to build voice agents across cars, call centers, and restaurants. Its technology is used across telecom, energy, hospitality, and automotive, and recent moves such as the LivePerson acquisition plan point to a bigger push into enterprise agentic AI. At the same time, SoundHound AI is still loss making, has a high P/S multiple, depends heavily on large contracts, and carries integration and cash burn risks. For investors, a key question is whether expanding partnerships, recurring revenue potential, and recognition for its agentic AI platform can offset those financial and execution pressures as the business scales.
SoundHound AI’s voice agents are racing ahead, but the real story may sit in how its cash burn, contract dependence, and valuation fit together in the 1 key reward and 3 important warning signs (1 is major!)
Penguin Solutions (PENG)
Overview: Penguin Solutions is an enterprise hardware, software, and services company that builds AI focused computing infrastructure, memory, and LED solutions for data centers, edge locations, and OEM customers, with products spanning OriginAI GPU platforms, Stratus always on systems, SMART Modular memory, and Cree LED components.
Operations: Penguin Solutions generates about US$1.50b in revenue, with roughly US$715.4 million from Integrated Memory, US$543.1 million from Advanced Computing, and US$244.2 million from its Optimized LED segment.
Market Cap: US$2.73b
Penguin Solutions is attracting attention because it sits in the plumbing of AI growth, supplying compute, memory, and AI factory infrastructure that enterprises and cloud providers need. The company is already profitable with a 15.4% ROE, and analysts highlight earnings and revenue forecasts that outpace the broader US market. Recent Q3 results, stronger FY2026 and FY2027 guidance, and partnerships with NVIDIA, SK Telecom, Dell, and others illustrate how deeply its technology is tied into real AI deployments. A P/E below many semiconductor peers adds to the interest. The catch is meaningful volatility, reliance on large deals, and fresh convertible debt that increase execution and balance sheet risk, so the key question is how these strengths and pressure points balance out over time.
Penguin Solutions sits at the heart of AI infrastructure, yet its P/E and new convertible debt leave a big question mark over how the story really stacks up. See what the 4 key rewards and 3 important warning signs (2 are major!) reveals next.
The 3 AI small caps in this article are only a starting point, with the full AI Small Caps screener uncovering 28 more companies whose stories around machine learning, automation, and data intelligence are just as compelling. Use Simply Wall St to identify and analyze the specific catalysts, financial setups, and narratives that matter most so you can focus on your highest conviction AI small cap opportunities.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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