TTEC Holdings Inc (NASDAQ: TTEC) is turning heads and making headlines in AI penny stocks to watch, at least according to hedge funds.

Listed at under $5, this small-cap company is riding the AI wave. The company has innovation in machine learning, automation, and data analytics, but before you take the plunge, let’s peel some layers.

The Allure of AI Penny Stocks

AI penny stocks such as TTEC, promise fast and furious growth (literally).

Given that industries from healthcare and finance to cybersecurity are leaning on AI, these emerging tech firms are tomorrow’s mega-caps.

Investors can turn a small sum of money into millions if these companies go crazy.

But remember, the stakes are very high and so are the risks.

But why TTEC?

Now, what’s with all the buzz around TTEC? It’s as if they’re transforming the market as they appear to be riding the AI tide with their novel approach towards customer experience and digital transformation.

Here’s what’s different about them:

• TTEC is significantly developing its AI-based services. This helps them gain an advantage over competitors in automation and data processing.
• With TTEC set to gain a large share of the digital services market, there is a lot of potential in the current shift AI is making to global business paradigms.
• They made it to the list of 12 AI penny stocks, which is a tremendous achievement for any company. This shows that there are some pretty smart investors who see great value here.

The dark side

Before you get too excited, here are the red flags around this:

• AI penny stocks are notorious for severe price fluctuations. A sudden change in market sentiment and one missed earnings report is all it takes for TTEC stocks to drop.
• Less money changing hands means that if selling comes in a rush, you may get left holding the bag of a terrible investment.
• TTEC’s financial standing may not compare well with more prominent companies, particularly in the realm of technology since small-cap stocks tend to vastly outperform them.

Should you flee or follow?

For an investor with a high-risk appetite, TTEC may appear to be a dream come true.

Unfortunately, this may end up being a high reward at a high risk if the market takes a turn for the worse.

The factors that make AI penny stocks appealing may result in considerable and rapid drops as well.

So, ask yourself these before you make any defining decisions:

• Can you stomach the volatility?
• Are you prepared for a potential liquidity crisis?

Is there a promise of disruptive AI technology that outweighs the risk of a stock potentially going to zero?