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

2) PagerDuty, Inc. (NYSE:PD)

Share Price as of September 20: $18.06

Short % of Float (As of August 30): 16.19%

Number of Hedge Fund Holders: 27

PagerDuty, Inc. (NYSE:PD) is engaged in the digital operations management platform in the US and internationally. PagerDuty AIOps tend to leverage machine learning and proprietary artificial intelligence to optimize PagerDuty’s foundational data model.

Bears believe that PagerDuty, Inc. (NYSE:PD)’s performance is expected to be impacted by subdued growth in revenue and billings moving forward. They believe that the company is exposed to several challenges related to the tough macroeconomic climate, which extended enterprise sales cycles and pressures in the SMB segment. In 2Q 2025, PagerDuty, Inc. (NYSE:PD)’s total paid customers declined to 15,044 mainly because of customer losses in the SMB segment. Also, the SMB market saw elevated churn and downgrades for 4 consecutive quarters. There are concerns related to ARR growth as a result of the evolving competitive landscape and uncertain macroeconomic conditions.

However, market veterans believe that PagerDuty, Inc. (NYSE:PD) should continue to see significant growth in enterprise segment bookings and high-value accounts. They remain optimistic about accelerating ARR growth and improving DBNR, with most growth anticipated to come from enterprise and mid-market segments. The company has been leveraging its location strategy, technology, and internal AI usage for strong efficiency, mainly in sales and marketing. Its new offerings, like AIOps, Automation, and CSOps, contributed to ~65% of the net new ARR.

PagerDuty, Inc. (NYSE:PD) believes it should be able to re-accelerate its ARR growth in 2H of the fiscal year, and expects ARR growth to exceed 10% by fiscal year 2026. The company improved its forecast for pro-forma operating margin and expects its gross margins to reach the higher end of the 84%-86% range through mid-FY 2026.

As per Wall Street analysts, the shares of PagerDuty, Inc. (NYSE:PD) have an average price target of  $21.10. According to Insider Monkey’s database of 2Q 2024, 27 hedge funds owned stakes in PagerDuty, Inc. (NYSE:PD).