10 Worst Artificial Intelligence Stocks Under $50 According to Short Sellers

5) Sprout Social, Inc. (NASDAQ:SPT)

Share Price as of September 20: $28.38

Short % of Float (As of August 30): 13.03%

Number of Hedge Fund Holders: 16

Sprout Social, Inc. (NASDAQ:SPT) is engaged in designing, developing, and operating a web-based social media management platform. Sprout’s AI and automation inherits the manual work involved in publishing, listening, analytics, employee advocacy, and customer care so that the decision-making can be efficiently done.

Bears opine that Sprout Social, Inc. (NASDAQ:SPT) will be impacted by the broader market trends and investor sentiments, as it navigates through a difficult landscape of economic uncertainties and shifting industry dynamics. Moreover, the concerns regarding weaker bookings and the transition to prioritizing annual contracts might also impact its future performance. Next, the bears believe that the company continues to face lengthening sales cycles, which might also weigh over its performance. Recently, a change in the CEO weighed over investors’ sentiments.

However, Wall Street analysts believe that the company’s product offerings should continue to support its growth objectives.  Sprout Social, Inc. (NASDAQ:SPT) recently highlighted a substantial increase in customers making a contribution of over $10,000 and $50,000 in annual recurring revenue (ARR). The company expects a positive outlook for the remainder of the year, with continued revenue growth. Improved gross retention rates and increased competitive win rates should continue to act as tailwinds.

Apart from successful product developments, like the Tagger product, Wall Street believes that its partnerships with Meta and Snapchat should continue to contribute to an optimistic outlook. Also, its go-to-market strategy, which includes verticalization of teams, led to an improvement in pipeline and opportunities.

Analysts at Robert W. Baird increased their price target on the shares of Sprout Social, Inc. (NASDAQ:SPT) from $38.00 to $40.00, giving a “Neutral” rating on 2^nd August. Insider Monkey’s 2Q 2024 data revealed that Sprout Social, Inc. (NASDAQ:SPT) was in the portfolio of 16 hedge funds.

TimesSquare Capital Management, an equity investment management company, released its second-quarter 2024 investor letter. Here is what the fund said:

“Among the wide variety of Information Technology companies, we prefer critical system providers, specialized component designers, systems that improve productivity or efficiency for their clients, and others that closely tie to increasing shares of corporate IT budgets. Sprout Social, Inc. (NASDAQ:SPT) designs, develops, and operates a web-based social media management platform. The combination of lackluster first quarter results and lower forward guidance disappointed investors. We decided to liquidate the position which suffered a -53% decline while held during the quarter.”