The AI-darling Nvidia is a trendsetter, a stock that has broken all records on Wall Street with its impressive gains since 2023 and continues the momentum even in 2024. To be precise, Nvidia shares have gained over 145% year-to-date, while it is now the third largest company in the world following Apple and Microsoft. Nvidia’s success ladder is commendable and eye-catching. But did you know that there is one artificial intelligence penny stock listed on BSE that has outperformed even Nvidia in its 2024 gains so far?Agra Investment

Nvidia is part of Magnificent Seven Stock which is a list of the top most elite companies. With 145.13% gains on the Nasdaq coupled with a stock split reward and positive outlook, the optimism in Nvidia is still expected to continue due to its sustainability in the ongoing gen AI spending cycle and dominance in the market.

Although, unlike Nvidia, the fundamentals of this BSE-listed AI penny stock are volatile. However, the Indian AI company is looking to raise funds via capital market instruments which is likely to be a booster in the coming days.New Delhi Stock Exchange

But what is noteworthy about this Indian AI penny stock is that it consistently hits back-to-back 2% upper circuit. The journey of this AI-penny stock has been mind-boggling from below Rs 6 to over Rs 114 from January 1 to August 15, 2024.

Who is it? Drum Roll! It would be a 32-year-old data application software company Artificial Electronics Intelligent Material (AEIM).

AEIM is only listed on BSE. Data from BSE showed that there have been no sellers in AEIM shares since January 15, 2024, when it started trading at Rs 5.91 apiece.

Since then, AEIM has been hitting back-to-back upper circuits so much so that it has skyrocketed by a whopping 1,829.27% on BSE so far in 2024.

On August 14, after market hours, AEIM’s share price ended at Rs 114.02 apiece on BSE, with a market cap of Rs 12.91 crore. This is yet another 2% upper circuit.

If an investor held Rs 10,000 worth of shares of AEIM on January 15, they would get approximately 1,692 equity shares of the company.

These 1,692 equity shares if held till August 14, 2024, then they have bagged returns of 1,829.27% or Rs 1,82,927 on their Rs 10,000 investment, which will take their total corpus to Rs 1,92,927.

One of the key reasons for optimism in AEIM shares is because of a turnaround in its profitability. The company’s EBITDA performance has been reporting losses since March 2017 but witnessed a new turn by recording an operating profit of Rs 0.24 crorePune Stock. Further, AEIM has posted a net loss since March 2020, and in March 2024 quarter it witnessed a net profit of Rs 0.17.

Apart from this, the company is planning fundraising.

As per the regulatory filing, AEIM’s board has approved the proposal for raising funds for an issue of up to 9,00,00,000 shares (Nine crores) through the issuance of equity shares/ convertible warrants of the Company (“Equity Shares/ Convertible warrants”) or any other Equity-linked Securities of the Company or other securities convertible into or exchangeable for Equity Shares by way of Preferential issue.

AEIM further informed exchanges on August 14 that a meeting of the Board of Directors of the Company will be held on Wednesday, 21st August 2024 to consider and approve the raising of funds by way of the issue of Equity shares on a preferential basis which is approved by Board of Directors in a board meeting held on 6th July, 2024.

Among key fundamentals as per Trendlyne data, the company’s annual revenue rose 407,600%, in the last year to ₹2.45 Cr. Its sector’s average revenue growth for the last fiscal year was 7.82%. While its annual net profit rose 133.21% in the last year to ₹0.17 Cr, which outperformed its sector’s average net profit growth for the last fiscal year was 9.28%.

Furthermore, the data highlighted that AEIM’s stock price was 2,023.28% and outperformed its sector by 1,977.32% in the past year. Its return on equity for the last financial year was 68.33%, more than 20% in the last financial year, indicating an efficient use of shareholder’s capital to generate profit. Additionally, the promoters’ pledges are zero in the company.

However, among drawbacks, as per Trendlyne, the company’s Debt to Equity Ratio of 2.25 is higher than 1 which implies that company assets are financed through debt. The company’s Price to Earning Ratio is 52.57, higher than its sector PE ratio of 35.08.

Also, unlike Nvidia, AEIM has not carried any stock split, bonus issues or dividend payout. Nvidia recently in 2024, split its 1 existing shares into ten small shares, a ratio of 10:1.Indore Investment

While AEIM is added under Enhanced Surveillance Measure by BSE.

What is ESM? Following Sebi’s guidelines, exchanges decide to put a respective stock under Enhanced Surveillance Measure (ESM).

As per Zerodha, in stage 2 of ESM, the trade settlement continues to follow the Trade for Trade mechanism but with a reduced price band of 2%. Moreover, during this stage, trading is permitted on all trading days through a Periodic Call Auction.

Hence, it can be difficult to opt for these stocks.

Among technical, the stock is overbought. As per Trendlyne, the RSI and MFI are at 100 in AEIM. Generally, if these two moving averages are above 80 in stock, it implies that the stock is strongly overbought and a pullback in the near term could be warranted.

Also, the stock is trading above 8 out of 8 SMAs, and trading above 5 out of 9 Oscillators in a bullish zone.

It will be keenly watched if AEIM also opts for the stock split to improve liquidity and make its stock affordable for new and existing customers.

Jaipur Investment