Billionaires Are Dumping Nvidia and Buying This Unstoppable AI Stock Under $10 Hand Over Fist

Mega-cap AI stocks have done the heavy lifting for two years, but a quieter shift is underway. Some billionaire investors have started trimming positions in NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) after a 62.77% one-year run and a $5.38 trillion market cap, rotating dollars into smaller AI-exposed names where the upside curve is steeper. The hunt is on for under-$10 AI plays with real revenue, real customers, and real catalysts, not just a buzzword in the 10-K.

With that in mind, here is one stock trading under $10 that fits the “billionaires are rotating in” narrative, with analyst price targets pointing higher and a drone story that ties directly to record U.S. defense spending.

Lantronix (Nasdaq: LTRX)

Lantronix is an Edge AI and Industrial IoT company that builds the embedded compute modules, routers, switches, and software that sit inside drones, defense systems, and connected infrastructure. In plain English, when a U.S.-made drone needs an onboard brain that can run AI workloads and stay NDAA-compliant, Lantronix is one of the names on the short list.

Shares closed at $6.36, well under the $10 ceiling and inside reach for any retail account. The stock has more than doubled over the past year, up 175.32%, yet the market cap is still only around $253 million, the kind of size where a single design win can move the needle.

Fundamentals are quietly turning. Q3 FY2026 revenue came in at $30.18 million, up 5.9% year over year, with non-GAAP EPS of $0.04. The headline grabber was the Embedded IoT Solutions segment, which carries the drone business and grew 22% year over year. Operating losses narrowed sharply, and cash sits at $23.5 million. Wall Street is leaning bullish, with one Strong Buy and three Buy ratings and an analyst price target of $9.12, implying meaningful upside from current levels. Forward P/E sits around 19x.

The bull case is straightforward. The FY2027 Department of War budget proposes a record $75 billion for unmanned and autonomous systems, and the FCC in December 2025 barred DJI and foreign drone makers from new U.S. approvals. That is a direct tailwind for NDAA-compliant U.S. suppliers, and Lantronix already has design wins with Red Cat/Teal for the U.S. Army Short-Range Reconnaissance program, Flock Safety for Drone-as-First-Responder, and engagements with Ukraine drone makers. Management raised FY2026 drone revenue guidance to $10 million to $14 million and expects drone revenue to roughly double in FY2027 to 15% to 20% of total revenue. CEO Saleel Awsare said the company aims to “deliver double-digit revenue growth in fiscal 2027.”

The risk that cuts against the thesis is dilution. Lantronix recently announced an offering of up to $30 million in common stock, which is a chunky number against a $253 million market cap. The company is still posting GAAP losses, federal procurement cycles have been bumpy, and small-cap defense names swing hard on headlines. None of that breaks the story, but investors should size positions with that volatility in mind. For investors hunting an AI name with edge-compute and drone exposure under $10, Lantronix is one of the cleaner setups on the screen.

A reminder before you click buy: a low share price by itself is never a thesis. Lantronix trades under $10 because it is a small-cap, not because Wall Street is sleeping on a sure thing. The drone tailwind, defense budget, and edge-AI roadmap are real, but so is the dilution and the lumpy government order book. Do your own research, check the most recent filings, and decide whether this fits your risk tolerance before treating any rotation narrative as gospel.