TUYA - Small-Cap Stock Tuya Is A Fast-Moving Chinese A.I. Play
2025-02-18 09:47:58 ET
Investors looking for a way to gain exposure to China’s %ArtificialIntelligence (A.I.) sector should look at %TuyaSmart (NYSE: ).
The Chinese-based company is an A.I. and Internet of things (IoT) platform as a service (PaaS) provider that was founded in 2014.
The company basically provides a cloud platform that developers can use to create and manage A.I. and Internet of Things technologies.
While still little known, Tuya’s stock has been on fire this year following the emergence of Chinese A.I. app %DeepSeek .
DeepSeek is an A.I. chatbot that is as powerful as any created by western technology firms such as %OpenAI and %Alphabet (NASDAQ: ) but was made for a fraction of the cost.
The launch of DeepSeek has forced analysts and investors to re-evaluate China’s A.I. capabilities and begin funneling capital to Chinese companies involved in the sector.
As a result, Tuya’s stock has been on fire, rising 80% so far this year on the New York Stock Exchange where it trades.
Yet, Tuya remains both a small-cap and penny stock. With a market capitalization of $1.80 billion U.S., Tuya can be considered a micro-cap stock.
And with a share price of $2.98 U.S., Tuya is a penny stock, defined as any security that trades for less than $5 U.S.
Given its small-cap and penny stock status, Tuya’s share price is prone to volatility and investors should expect big swings both up and down.
However, many analysts are turning increasingly bullish on Tuya as China quickly becomes a dominant global player in A.I.
Investment bank %MorganStanley (NYSE: ) recently recommended investors buy Tuya stock ahead of the company’s upcoming financial results on Feb. 26.
Morgan Stanley reiterated its overweight rating on Tuya stock and raised its price target on the shares to $3 U.S. from $2.30 U.S.
In a note to clients, the bank said that “strong revenue growth momentum” is likely to continue at Tuya, adding that “We think it leaves significant room for the share price to catch up with value.”