Investors eyeing AI industry growth can buy shares of leading company Nvidia, though some argue it’s overvalued. Alternatively, investing in lesser-known AI-focused players could pay off if they show signs of recovery. Recursion Pharmaceuticals (NASDAQ: RXRX) has seen a 24% share price drop this year, prompting debate on whether it’s a good buy.

Recursion Pharmaceuticals leverages AI to speed up drug development, aiming to lower costs and increase success rates. Developing new medicines is costly and risky, with most clinical compounds failing to reach market. By using AI algorithms to predict effective compounds, Recursion hopes to revolutionize drug development and increase profitability.

While Recursion’s AI-based approach is promising, the lack of tangible results, like no medicines on the market or in late-stage trials, has caused share price declines. Competitors like Eli Lilly are making strides in AI drug development partnerships, casting doubt on Recursion’s potential success. Partnering with Roche and building a supercomputer with Nvidia may give Recursion an edge, but competition is fierce.

Investing in Recursion Pharmaceuticals carries significant risk, with potential for high rewards if their AI-based approach succeeds. However, without concrete results, the stock could continue to decline. Investors comfortable with risk and volatility may consider investing, but it should be a small portion of their portfolio.

Read more at Yahoo Finance: 1 Reason to Buy This Beaten-Down Artificial Intelligence (AI) Stock, and 2 Reasons to Sell