Investing in Small Cap AI

2 AI Stocks Under $5

Estimated read time: 1:20

    Summary

    In this episode of Zack's Market Edge, host Tracy Rynck is joined by Mark Zinski, a small cap analyst from Zacks, to discuss fascinating small-cap AI stocks priced under $5. The first company discussed is FiscalNote Holdings (ticker: NOT), which analytically processes legislative and regulatory data using AI. The second is iCAD Inc (ticker: IAD), which revolutionizes breast health diagnostics with its AI-powered solutions. Both stocks represent intriguing investment opportunities due to their specialized niches and the potential for growth and market share expansion, despite current financial challenges.

      Highlights

      • FiscalNote Holdings and iCAD Inc are small cap AI stocks trading under $5, offering unique investment propositions. 💡
      • Mark Zinski discusses the strategic advantage of FiscalNote in leveraging AI for regulatory insights. 🤖
      • iCAD uses AI to improve mammogram diagnostics, holding substantial market share in the U.S. 📊
      • These stocks could benefit from increased AI adoption across sectors, despite being in early growth stages. 🚀
      • The conversation explores how AI tools complement human roles, enhancing productivity and decision-making. 🌐

      Key Takeaways

      • Explore the potential of small cap AI stocks for growth opportunities! 📈
      • FiscalNote Holdings (NOT) utilizes AI to decode regulatory data, offering significant insights. 🧠
      • iCAD Inc (IAD) leverages AI in mammogram analytics, enhancing diagnostic accuracy and efficiency. 🩺
      • Both companies hold a strong niche position, paving the way for potential multiples expansion. 🌟
      • AI's role as a co-pilot in industries, augmenting human expertise rather than replacing it, is crucial. 🤝

      Overview

      In the newest episode of Zack's Market Edge, seasoned host Tracy Rynck teams up with Zacks' small cap analyst Mark Zinski to delve into the world of small-cap AI stocks, specifically those trading under $5. These stocks, FiscalNote Holdings (NOT) and iCAD Inc (IAD), highlight unique ways AI is being harnessed in the financial and healthcare sectors respectively, showing promise despite being relatively under the radar.

        FiscalNote Holdings stands out for its use of AI in processing massive volumes of regulatory and legislative data, providing businesses with critical insights into compliance and policy impacts. This gives FiscalNote a potential edge in the private sector where regulatory navigation is crucial. Meanwhile, iCAD Inc reinvents the mammography landscape by enhancing image diagnostics with AI, boasting a significant market share and offering subscription-based solutions that stabilize revenues.

          Both companies illustrate the broader trend of AI functioning as an enabler of industries, showing that while AI adoption is in its nascent stages, the potential for productivity and precision enhancements is monumental. These small caps, despite financial hurdles, represent a strategic investment in AI's evolving role as an augmentative force in specialized markets.

            Chapters

            • 00:00 - 00:30: Introduction to Zach's Market Edge Podcast In this chapter, the host Tracy rck introduces the podcast 'Zach's Market Edge,' which focuses on investing. This episode features a guest, Mark zinski, who is a small cap analyst at Sachs, to discuss topics related to small cap stocks.
            • 00:30 - 01:00: Introducing the Guest - Mark Zinski In this chapter, the focus is on introducing Mark Zinski, a guest who specializes as a stock analyst with a specific interest in small cap stocks. Contrary to the host, who is a stock strategist focusing on value stocks and the broader economic picture, Mark's expertise lies in the analysis and evaluation of smaller stocks. The distinction between the roles of strategists and analysts is highlighted, with strategists looking at larger economic and sector trends, while analysts like Mark focus on individual stock performance.
            • 01:00 - 01:30: Difference in Titles - Stock Strategist vs. Analyst The chapter explores the differences between stock strategists and analysts, using the context of the energy and housing sectors. The speaker notes their personal interest in these industries, but clarifies their role is not as a covering analyst in these areas. The chapter highlights the importance of specialization, as exemplified by Mark, a specialist in small cap stocks. Mark previously joined the discussion with insights on small cap AI stocks in 2024 and is set to return with more information to kick off 2025.
            • 01:30 - 02:00: Discussion on Small Cap Stocks The chapter discusses small-cap stocks, focusing primarily on two intriguing small-cap AI stocks that are trading under $5. While the speaker personally tends to avoid such low-priced stocks, acknowledging their fun nature and the prevalence of such options in the small-cap market.
            • 02:00 - 02:30: Introduction to Two AI Stocks Under $5 The chapter introduces two AI stocks that are trading below the $5 mark. These are small-cap stocks, and one of them has a Zacks rank. The conversation features Mark, who is a returning guest on the podcast, and Tracy, the host. They set the stage for discussing these stocks in further detail in the following sections.
            • 02:30 - 03:30: FiscalNote Holdings Overview In this chapter titled 'FiscalNote Holdings Overview,' the discussion is around AI stocks, specifically focusing on companies in which the speaker's family portfolio is invested. The speaker discloses that they do not own these stocks personally and had no knowledge of them until their colleague mentioned them. Additionally, one of the companies has been in communication with the speaker, and insights into this interaction are sought.
            • 03:30 - 04:30: Conversation with FiscalNote Management The chapter delves into a conversation with an analyst who has keen insights on small cap stocks. The focus is on FiscalNote Holdings, indicated by the ticker NOTE. The stock currently holds a number three rank on the X ranking system. The discussion aims to explore what makes FiscalNote Holdings noteworthy in the small cap stock market.
            • 04:30 - 05:30: FiscalNote's Business Model and Market Position The chapter discusses the relevance of AI in FiscalNote's business model and market position. AI continues to be a significant focus, justifying its importance within the company's operations. The discussion recalls previous conversations about AI-related investments, likening them to 'picks and shovels' plays. These are compared to barnacles, indicating they provide essential but perhaps less obvious support in the broader market framework.
            • 05:30 - 06:30: Debt and Profitability Discussion for FiscalNote **Chapter Title: Debt and Profitability Discussion for FiscalNote**
            • 06:30 - 08:00: New Product Developments and Strategic Hires at FiscalNote FiscalNote may not be experiencing exponential growth like other companies, but they have unique aspects and seem undervalued. The discussion will explore these details.
            • 08:00 - 09:00: Introduction to iCAD Inc. In this chapter, the focus is on explaining why iCAD Inc. is considered undervalued and a promising bet for investment. The key points include their compelling stories and competitive products in the market. Additionally, there's an expectation for multiple expansion, as it appears that the company isn't currently receiving the multiples seen in the broader AI space. The hope is for this to improve over time, enhancing the company's valuation.
            • 09:00 - 10:00: iCAD's Market Share and Business Model The chapter discusses iCAD's business model and market share, focusing on its potential for expansion and investor benefits. It highlights the significance of software and AI in iCAD's operations and draws parallels with major players like Microsoft in the generative AI space.
            • 10:00 - 11:00: Financial Position and Market Potential of iCAD The chapter discusses the financial position and market potential of iCAD. It begins with a comparison between iCAD and other applications, emphasizing the uniqueness of iCAD compared to well-known applications like ChatGPT. Additionally, there's mention of a conversation with management at FiscalNote, highlighting how they differentiate from ChatGPT. The chapter likely explores iCAD's financial strategies, potential market opportunities, and how it positions itself uniquely in the competitive landscape.
            • 11:00 - 12:00: Industry Competition and Technical Aspects of iCAD Products The chapter discusses the role of AI in analyzing regulatory and legislative data that affects both private sector companies and government agencies. It highlights that approximately half of the clients benefiting from this AI analysis are private companies, while the other half are government agencies. This emphasizes the impact of regulatory environments on various sectors.
            • 12:00 - 13:30: Zach's Analysis on iCAD's Financial Metrics In this chapter, Zach analyzes iCAD's financial metrics with a focus on the AI initiatives being employed more by the private sector. The AI sector utilizes a distinct dataset that is more robust compared to what ChatGPT uses, boasting an extensive data ecosystem with over 50,000 datasets.
            • 13:30 - 14:30: Future Prospects for Small Cap Stocks The chapter discusses the complexity and implications of different levels of legislation and regulation impacting businesses, particularly focusing on small cap stocks. It highlights how companies must navigate a multi-layered regulatory environment, including local, federal, and international regulations. The example given involves an automaker considering expansion into a European country, emphasizing the need to understand specific international trade regulations related to electric vehicles.
            • 14:30 - 16:00: Impact of Trade and Tax Policies on Small Caps The chapter discusses the strengths of a fiscal management product over generic solutions like Chat GPT. It highlights the two main differentiators of this product: a more robust ecosystem that ensures reliability and accuracy in its outputs.
            • 16:00 - 17:00: Conclusion and Wrap-Up of Discussion on AI Stocks The chapter focuses on the conclusion and wrap-up of a discussion concerning AI stocks, specifically touching on regulatory aspects. It includes precise responses to questions related to regulation and legislation. A major point of discussion is about the access to regulatory data across different regions such as countries, states, and cities, and whether there is a cost associated with acquiring this data.

            2 AI Stocks Under $5 Transcription

            • 00:00 - 00:30 [Music] stocks bonds ETFs straight out of downtown Chicago this is Zach's Market Edge welcome to Zach's Market Edge the podcast about investing in your life I'm your host Tracy rck and this week I'm joined from our favorite guest I want to say now on the podcast Zach's very own Mark zinski who is the small cap analyst here at Sachs that's small cap stock
            • 00:30 - 01:00 and that's a little bit different title than What My Title is I am a stock strategist and I focus on the value stocks and I run the value investor uh portfolio here at Sachs but Mark is an actual analyst so he's specializing in those small cap stocks the strategists like myself we look at the bigger picture we look at what's going on in the economy I do look at certain sectors
            • 01:00 - 01:30 that I like to study like energy and housing for those of you who follow me you know this but I am not a covering analyst on either of those sectors and Mark is much more of a specialist on the small caps he joined us a couple of weeks ago in 2024 with some small cap AI stocks and he's back with more to start 2025 I promised you I would have him back on um I will will have him back on
            • 01:30 - 02:00 to talk about other small caps Beyond AI but if he's got some small cap AI stocks that are intriguing for us why not take a look now these two stocks happen to be obviously small caps but they're also trading under $5 I know many of you love these stocks that are under $5 I tend to stay away from them a bit but they are fun to take a look at and in the small cap realm you do tend to find a lot more
            • 02:00 - 02:30 stocks trading down in this Level under the $5 Mark so he's brought us two stocks again this week that are small caps they're under $ five they're in AI one of them even has a Zach's rank but only one um but um as I mentioned I love having him on so welcome back to the podcast Mark thanks for having me Tracy good afternoon yes yes okay so you're
            • 02:30 - 03:00 back again with some more AI stocks and um in full disclosure you own both of these in like your family portfolio I do not own either one of these and until you told me about them um in the last couple of weeks I had no idea what these stocks were um so I don't own them you own them in the family and you actually have been uh talking to one of them as well so I'd love to get your insights on
            • 03:00 - 03:30 both of these companies because as I just mentioned you're the analyst on these small cap stocks so you have some great insights so let's start with the first stock that you wanted to talk about and that is fiscal note Holdings the ticker is note n o t and this is the stock that has a x rank it's a number three right now but what is it about fiscal not
            • 03:30 - 04:00 Holdings um obviously you said these were in the AI area what do they do why is AI so important with this stock well obviously AI is still you know a hot a Hot Topic hence that's why you know we're we're we're talking about it again um if you recall last time the two names we talked about um were more what we would call pixs and shovels plays they are kind of barnacle on the
            • 04:00 - 04:30 the bigger tech companies they provide some sort of service that helps them accommodate uh their ai ai products and services the two companies today are actually AI companies these are software companies um that have proprietary software and hence have very high uh gross margins um so um but they are also very um nuanced
            • 04:30 - 05:00 they're not um currently um having the kind of uh parabolic Topline growth um that those other names that we talked about previously um are are enjoying however um they do have some interesting nuances and I think just objectively they look undervalued to me so we're going to dive into the det details to
            • 05:00 - 05:30 try to explain why we think they're undervalued and why the BET here is um several F number one we think they have very good stories and um and good products that are that are competing very well in the market and secondly we're um we're hoping for some multiple expansion we think that they're not really getting the kind of multiples that that we're seeing in the AI space and so the hope is that over time
            • 05:30 - 06:00 through some more execution on a quarterly basis uh that those multiple uh multiples can expand and that will you know uh potentially give us a lot of upside uh for the investor um now wait one question I have so when you mentioned both of these are software companies and when I think of software and AI I kind of think of the big guys like even like a Microsoft or something and that they're making these generative AI products and that's kind of in my
            • 06:00 - 06:30 mind so far what I think the applications are that are out there but this that's not what this is right I you know I I actually I spoke with uh management over at fiscal note last week and one of the first things that kind of comes across is how they're different than chat GPT um so just a quick
            • 06:30 - 07:00 little breakdown of a fiscal note so um their AI is breaking down all the Regulatory and legislative data that's out there that impacts you know companies on a daily basis so about half of their clients are uh you know private sector companies that are impacted you know by by these um by this regulatory environment then the other half is are actual government agencies the growth is
            • 07:00 - 07:30 really coming more from from the private sector uh that's employing uh AI um so um they're taking um they're the data set that they're using is different than what um chat PT is using so they have a very robust um data uh data ecosystem excuse me with over 50,000 th000 different data
            • 07:30 - 08:00 sources um so they're combining not only local government type of legislation and regulations but also at the federal level International regulations think uh you know international trade regulations by a country per country basis and so if you were to query um let's say you're a company looking to expand um you're an autom maker looking to expand into some country in Europe and you're wondering what the regulations um on electric vehicles are there if you
            • 08:00 - 08:30 were to ask chat GPT uh the management for fiscal note would argue that you'll get kind of a generic response from Chad GPT and it may not be entirely accurate um so the two key points that they think differentiates their product because of their more robust uh ecosystem is that you're going to get with their product uh more reli able uh accurate and
            • 08:30 - 09:00 precise answers to your to your you know questions regarding uh certain regulation and um certain uh legislation now where are they getting their ecosystem though do they have to pay to get access to um you know a lot of this regulatory uh data from various countries and states and provinces and everything else cities um and is that
            • 09:00 - 09:30 part of the cost of their business now correct that is part of their their cost but um as of the last quarter here um their let's see their gross margin excuse me for a sec actually their gross margin increased a thousand bips in the last quarter to 79% and so um gross margin is you know that that's a discussion for another day but is one of my favorite quantitative
            • 09:30 - 10:00 uh metrics to look at because it has the you know the selling price of the product in there so it's Market driven um there's not as much room to kind of uh you know massage the numbers which is possible at the operating expense level but that's another discussion so anyway very high gross margin business so obviously a pretty coveted uh product in the market um let's take a look since we do have a rank on it it does appear to have
            • 10:00 - 10:30 several analysts that are covering it even though it has a market cap of just 168 million it is trading under $5 as we said the 52e high is 227 the 52e low is 75 C it's not yet earnings positive but um still again has these analysts on it um it has quite a um a decent trading volume on it but here I'm
            • 10:30 - 11:00 showing the price consensus and surprise so it looks like they uh went public or became a public company in 2022 was this a spack that was converted over I don't know if you know yeah I'm not I'm not I I do yeah I do think there was a dpack involved but I'm not I'm not positive yeah because that's usually when I see a chart like this that's usually what it means but um you can see it had a has had a bunch of earnings misses but it has had quite a few of the beats in
            • 11:00 - 11:30 there but now that it's got a couple of analysts um let's look at the detailed earnings estimates on zach.com um we have three different estimates for revenue and we've got two on the earnings now um this year though actually it looks like is this it does look like it's supposed to be make seven cents this year
            • 11:30 - 12:00 so that could be good but uh 2025 which is our current year we have an estimate of a loss of 38 cents but um Mark why don't you explain to a lot of the listeners too why with small cap companies it's not always uh you know that big of a deal to see negative earnings for you know a while while they're growing right um so a couple of things going on with this company the first one
            • 12:00 - 12:30 the real one of the big overhangs to the stock was their level of debt okay and they C they recently divested uh one of their businesses uh for $90 million um and that was um uh the uh the board .org um part of their portfolio and they got a nice multiple for that um because that that business was doing about 15 million in revenue on
            • 12:30 - 13:00 an annualized U uh annual annualized revenue recurring basis and so you know a sixish multiple they got on that business so they're able to pay down a significant part of their senior debt um and so that has certainly helped the stock and has kind of helped a ag some fears that investors were having they have been doing some of these kind of peac meal divestitures
            • 13:00 - 13:30 um on a regular basis at very nice multiples and using the proceeds to delever the balance sheet and in talking to management it looks like um that's going to continue so I think part of the upside of this story is that they continue to uh divest some of these non-core assets of their business uh at attractive multiples and that they can use those proceeds to continue to um to delever the the balance sheet but the debt debt has become much more uh you
            • 13:30 - 14:00 know manageable now and so they while they're not profitable I think it's important to look at um the adjusted iida margin which in this last quarter was 11.7% uh versus 2.2% in the prior year so they have undergone um a real kind of cost efficiency evaluation of the business and they're clearly executing on it um Revenue was down a little bit
            • 14:00 - 14:30 because of the uh the divestures that I that I mentioned previously uh but on an Apples to Apples basis this last quarter Revenue still grew uh 2% so uh this industry businesses in this industry it's it's very common for them to have adjusted ebaada margins you know in the 20 plus range like even you know 25 upper upper 20 percentage and so
            • 14:30 - 15:00 they're at 11.7% right now so that's part of the BET here is that they're going to continue improving uh that ebaada margin and continuing to get U you know leverage um which is obviously facilitated by that that high gross margin now an investor might argue well gez you know the 2% Topline growth that's not that great um they've brought in um a new Chief product officer um um who has a lot of experience and was part
            • 15:00 - 15:30 of um I don't know if you're familiar with um this this company uh Tracy it's called case text and it's basically a legal AI assistant and it was recently sold um to Thompson Reuters uh for 650 million despite having kind of minimal Revenue um and so as you know given your legal background you can well imagine um there an appetite for opportunities to
            • 15:30 - 16:00 kind of bring down in-house legal costs and so you know bringing this this person in with that kind of background um is very encouraging so the Hope here is that you know Top Line can kind of get rejuvenated hopefully here uh in the short term they're also releasing a new product a new co-pilot product um uh this quarter as well and hopefully hopefully that will also help kind of um
            • 16:00 - 16:30 uh rejuvenate Top Line but at this point it's like I said it's more of a leverage story you know continuing to watch that adjusted e bada margin improve um and then hoping you know for that margin expansion because for an AI company you know um with a 79% gross margin um the stock is trading at less than three times you know trailing sales um you know in this industry AI names are typically getting six to 10
            • 16:30 - 17:00 times sales so you know this is a kind of a you know admittedly a longer Arc uh you know type story uh but but that's that's the bet you're making is that that execution will continue happening and that that um that valuation um multiple will will keep expanding yeah uh it's always it's always more volatile and uh risky with the small caps to some
            • 17:00 - 17:30 extent and certainly ones under $5 are going to be more volatile on the trade for sure you're going to have bigger you know uh you know moves in the stock plus even just uh someone like us doing a podcast on this stock will likely move it when the podcast launches right and they have about and and and just so investors know they have about 30 million in cash short-term
            • 17:30 - 18:00 Investments um they did file an S1 um for what was that uh number I think it was like um fairly you know minimal amount like a 10 million shelfish so um but again the you know they're not obviously hemorrhaging cash uh cash flows improving because of the like I said the E margin is improving um
            • 18:00 - 18:30 and they have the hopefully they can divest another business or two that will obviously help the cash as well but you know there is a small possibility that there you know there might be a minor a minor raise you know uh down the road right right just so investors always out there yeah okay so that's fiscal note ticker n so let's move on to the next stock um am I saying this right it's icad is that right okay IAD Inc ticker is IAD i a d i
            • 18:30 - 19:00 a and I have off of their their site they are AI powerered breast Health Solutions and I took that to mean um and after talking with you about it that this is on the mamogram side perhaps of using AI to um make you know better
            • 19:00 - 19:30 mammograms basically exactly exactly so I think we can all relate to having a meeting with that um you know whether unfortunately an oncologist or radiologist and analyzing the uh the film and and and being like all I you know I see a bunch of you know kind of clouds on there what does it all mean and you know um this um soft and this has been going on for you know many years right they've talked about um
            • 19:30 - 20:00 whether or not you know Radiologists will be replaced by this uh this technology uh you know we're not at at that point obviously um I think they're using it more as an extra set of eyes and more importantly it's reducing the amount of reading time so hospitals like to be productive obviously so the more scans they can read you know as facilitated by the software obviously the more money they make and the happier they are so that's I think really uh the
            • 20:00 - 20:30 key selling point um I think um it's important to look at the uh the market share here so IAD thinks that they have about a 40 I'm sorry a 46% market share of the US AI market for um these radiological readings um the and they think that at this point still only
            • 20:30 - 21:00 37% of the imaging centers are using AI so they're getting 46% of that 37% for a a a total market share of about 177% so the BET here is that um you know AI just becomes more accepted and obviously uh is the efficacy is proven out more and that that 37 % penetration
            • 21:00 - 21:30 you know hopefully goes to 100% where all the imaging centers um are utilizing AI assuming you know that that 46% market share St um stays the same you know you could you know you're looking at a two or three exer you know as as this grows with the upside that maybe they grow that 46% market share uh you know even more there's you know there's room uh U to grow that so um they've got
            • 21:30 - 22:00 um a uh uh they've really improved their um their cash burn um it was only uh 1.5 million in this last quarter versus 3.6 million um at the beginning of 2023 um that's been a real point of emphasis for them um they've got almost 20 million in cash and they've explicitly said there there's no need to to raise any funding um again now I see that they they are
            • 22:00 - 22:30 smaller than fiscal Noe on a market cap basis they have a market cap of only 50 million but you just said they had 20 million in cash correct they have 18.8 million yep okay wow this is a 86% gross margin business so um you know they're clearly doing something right and importantly um they're high percentage of their revenue they've changed their
            • 22:30 - 23:00 business model so uh you know it's more subscription based so they've a higher percentage of their revenue is recurring um that's the same as fiscal note by the way um so those are two key things to note about these businesses is the the high percentage of annual recurring Revenue so while the Topline May growth may not be as robust as investors are looking for you've got the downside protection because you know it's curring Revenue so right A lot of people like
            • 23:00 - 23:30 those subscription based businesses for this reason um because it is you know what and especially if you sign a contract like I see that they signed some kind of three-year Cloud deal with Charlotte Radiology in the third quarter um and then us Radiology they said has 175 outpatient imaging centers across 13 states like you know the next three years what's going to be happening with
            • 23:30 - 24:00 that deal at least exactly um and we know right that there you know there is an issue with some false positives with some of these readings and so this technology you know um has been shown to help uh you know alleviate that problem and it's been trained on um six million images from 100 plus global centers and so again I was just talking about the US market I'm not even talking about what could happen globally I mean they're
            • 24:00 - 24:30 looking at licensing some of their uh technology globally but you know there's that's additional upside um you know in terms of what they might be able to do um you know outside the US um who's their competition you said they have 177% of the US market who bigger player out there that's also doing it or like like I said that that 17% is the 46% % of the
            • 24:30 - 25:00 37% of the 37% of imaging centers are using Ai and so of that 37% they've got the 46 which gets you the seven so I mean they have huge market share so they would be yeah competing with like GE Healthcare um you know the regular um you know big players in that in in that Imaging space um but clearly you know given the 46% share um I think they're um technology is definitely
            • 25:00 - 25:30 holding up and I mean they have a two-part um you know algorithm um I guess that's kind of unique to their technology um which looks a little bit more at the um uh the dispersion um and the concentration um of the of what's appearing on the image in and and more specifically trying to address the is issue of you know the the breast density
            • 25:30 - 26:00 complication that can obscure these images and make the readings difficult so U they think they've got a better mouse trap for that in other words um now let me just show uh what's going on on zach.com for this stock because we don't have a rank on it so that means we're going to have a lot less data but you can kind of see I put up the price consensus and surprise chart we did have analysts on it through
            • 26:00 - 26:30 2023 and then you see like no no red or green arrows no uh nothing for earnings and that's because that's when we stopped getting any analyst coverage on it all you're seeing is they've got a lot of cash so they don't need to get any funding but that's another right right right right um this one 52 week high is $265 the low is
            • 26:30 - 27:00 a118 and as we said the market Cap's around 50 million what's the price to sales on this one what what what is they're looking like the EV sales on a on a uh trailing basis is 1.7 times and so again this is an AI play trading at 1.7 times trailing sales with an 86% gross margin so um again the BET
            • 27:00 - 27:30 here is that we're going to get multiple expansion as they continue to execute I'm this is I arguably as with fiscal note these are longer Arc plays there these aren't going to be multi-baggers you know next month so I don't want anyone to hold me accountable for that um but I do think this is going to be a nice Steady Eddy you know as I just think that more and more of these imaging centers are
            • 27:30 - 28:00 going to convert over to um utilizing AI because not only is the efficacy pretty well established uh from a profitability standpoint it improves the productivity of the radiologist which means more scans so it's hard to argue with that right right for sure um many of us who have had these scans know the backups that happen um through
            • 28:00 - 28:30 the radiology department we have to wait to get the results um longer than maybe we thought and that kind of thing so um any kind of improvement there is helpful just to the whole system of getting these images done yeah I just think it's it's remarkable how much um data you right is that the AI is is Consulting I mean it's Consulting these
            • 28:30 - 29:00 millions of scans that have been done previously and that which have an outcome attached to them each of those scans whether it was cancer or was it a false positive or not and uh that's just extremely valuable data which can be crunched instantaneously so with no offense to to Radiologists but right right right for sure um human is a little infallible so right exactly but don't you think this
            • 29:00 - 29:30 will be used in conjunction and it already is in conjunction with radiologist correct I think it's not so much a u uh you know replacement for the radiologist but as a productivity enhan and that's kind of right one of the debates about AI as to whether or not it actually is going to replace certain professions or is it going to be sort of a co-pilot uh uh an adjunct that's going to help with productivity so um there remains to be seen but I think it's going to be some combination of of those
            • 29:30 - 30:00 rules okay so what what else could we look forward to talk about um later on this year in 2025 um obviously we'll probably still be covering some more AI stocks at least I hope we will but what other areas or Industries are you know kind of uh popular or you know intriguing let's use that word intriguing here for small caps
            • 30:00 - 30:30 in 2025 well I think I think I think a lot of investors are kind of um a little bit on hold with what you know is going to happen with this new with the new Administration right especially in terms of trade um and by the way let's say you know our trade policy does um change significantly a uh a play like fiscal node is is you know perfectly
            • 30:30 - 31:00 situated to benefit from that you can just imagine um these trade departments being like Oh my gosh what a nightmare all these these new tariffs you know we want to sell products into such and such you know what's going on here um to have that kind of tool to help you I think is you know definitely an advantage for for a company like fiscal not so um you know
            • 31:00 - 31:30 generally speaking as a category small caps um tend not to do a lot of business outside of the United States so if you do believe that we're gonna there's somewhat of a a potential decoupling from the global Network that's going to occur via trade policy then you know arguably small caps May benefit because they won't be sub you know as exposed um you know to to the tariffs and they won't have to kind of
            • 31:30 - 32:00 quickly uh you know readjust their supply chain as much um as as as their large cap Brethren so that's just um I think that's just something you know to really consider and and and to keep top of mind um because it's still you know I think there's a lot of uncertainty uh as to um as to the trade policy and as we know the other the other key element
            • 32:00 - 32:30 about small caps is they do have a pretty acute sensitivity to interest rates for Better or For Worse there's at least the perception out there that smaller companies um are more burdened um you know by an increase in in interest rates that they've got less sort of negotiating flexibility in in terms of getting access to Capital um I mean obviously you want to look at it uh on a Case by
            • 32:30 - 33:00 case Company by company basis um you know looking at the the company's respective debt levels but that certainly is the perception out there so small caps as a class you know if you just look back and and you can run charts um correlating U the performance with the Russell 2 and interest rates you'll definitely see a correlation there so um you know what about this push to have like a return to
            • 33:00 - 33:30 manufacturing and we saw some return during the Biden Administration but the Trump Administration really wants to you know press this even further it seems and you know they may even try to get a lower tax corporate tax rate on manufacturers that are Manufacturing in the United States um could there be some Renaissance in small cap Manufacturing in the next couple of years as know small caps uh in
            • 33:30 - 34:00 general um have a higher tax burden um than their large cap Brethren because they can't um sort of dilute their tax base with operations abroad you know like let's say like in Ireland or what have you to bring down the um the hybrid tax rate and so they really benefited when that tax rate went you know from was it 35 to to to 21 now if it goes down even further that
            • 34:00 - 34:30 definitely disproportionately helps the smaller companies so that's another implication to um uh to keep your eye on so trade policy and tax policy um and then as as well as as you said on the onshoring phenomenon I don't know I think clearly as it relates to you know the chips uh things that have a national security uh implication that certainly seems um like where on Shoring
            • 34:30 - 35:00 will probably start or makes the most sense now you know it will it extend you know beyond that you know I don't know but um but you're right I I I certainly think that's something to keep an eye on and that would benefit um the smaller companies okay so but for now we are wrapping up our discussion of two AI small cap stocks under $5 to for you to check out and research
            • 35:00 - 35:30 on your own and those tickers are for fiscal notes again ticker n o t and IAD is i a d and hopefully we have Mark back soon with some more small cap names and as always you can get all of our podcasts on Apple we're on Spotify we're on Amazon music you can get all of our video podcasts on the YouTube channel
            • 35:30 - 36:00 Zach's investment research over there I know many of you are subscribing check out our other podcast with Mark it's from December 2025 and it's two AI small cap stocks you can check out that podcast and of course subscribe to our Channel on YouTube but as always I'm here to bring you whatever is going on out in the stock market and that includes these small cap Nam so I'll be back next week with some more
            • 36:00 - 36:30 stocks [Music]