Investors looking for help finding the best under-the-radar stocks may have a new ally: the AI chatbot. Using the prompt “publicly traded companies that may be on the cusp of breaking out in popularity in May 2023,” the chatbot created a list of five top stocks to dig into. I was flattered to find that the AI list included several hidden gem stocks I put on a list of undiscovered stocks in Feb.

Even better, the chatbot offered up some thoughts as to why these stocks might be good buys for May. I’ve summarized those comments with some of my own thoughts on the three stocks chosen.  

Kura Oncology (KURA) 

When I wrote about Kura Oncology (NASDAQ:KURA) in Feb., I made note of the company’s focus on menin inhibitors. As I wrote at the time, ”The goal is to change the existing paradigm of cancer treatment that focuses on killing cancer cells before they can kill healthy tissue. This approach attempts to “trick’ the cancer cells into becoming healthy cells.” 

Kura Oncology is a small-cap biotech company that will not have a commercially available product for several years. However, it does have a robust pipeline. And it’s lead candidate, tipifarnib, a farnesyl transferase inhibitor, is currently being studied in multiple Phase 2 clinical trials in solid tumor and hematologic indications. 

Furthermore, the company does have enough cash on hand to get through 2024. This is important because investors can buy KURA stock without undue concerns about stock dilution because the company has to raise capital.  

The company reports earnings on May 3 and investors will be keen to hear updates regarding the clinical trials. If they like what they hear, KURA stock may move higher which could put pressure on short sellers who own about 12% of the company’s stock as of this writing.  

Seabridge Gold (SA) 

Seabridge Gold (NYSE:SA) is a junior mining company with a 100% stake in the Kerr Sulphurets Mitchell mine in British Columbia. It’s one of the world’s largest undeveloped gold projects. This highlights the risk and the reward that investors must consider.  

Central banks have been buying gold for over a year. But now, many retail investors are getting in on the gold rush. Add in a weaker dollar and concerns about a weakening economy and 2023 looks like it will be good for gold bugs. Plus, if the electric vehicle (EV) movement continues to accelerate, the world will need much more copper.  

The risk is that demand could tail off which brings to mind another point. The Kerr Sulphurets Mitchell mine is not expected to be operational until 2024. And the company has petitioned to extend that opening until 2026. But SA stock is up over 8% in the 30 days ending April 28 on no news. That means if gold has coattails, this could be a good stock to ride higher.  

Insteel Industries (IIIN) 

Insteel Industries (NYSE:IIIN) is a small-cap steel company engaged in the manufacturing and marketing of steel wire reinforcing products, such as for bridges and buildings. The company also stands to benefit from the recently passed Infrastructure Bill. Plus, its manufacturing facilities are located in the U.S. – another plus when the government is looking to onshore U.S. manufacturing.  

Insteel missed on earnings in April. However, that hasn’t affected the IIIN stock price which is flat for the year as of this writing. At the moment, IIIN trades at 6x earnings. With that said, investors have to be concerned that the stock is cheap for a reason. Then again, U.S. Steel (NYSE:X) and Cleveland-Cliffs (NYSE:CLF) reported favorable earnings that show strong demand and an ability to raise prices. If that trend continues, Insteel may benefit from a halo effect in the sector.  

On the date of publication, Chris Markoch did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.