In this article, we will discuss the 10 Worst Artificial Intelligence Stocks Under $50 According to Short Sellers.
The US artificial intelligence (Al) market size was pegged at US$123.07 billion in 2023, which should be able to compound at ~19.3% over 2024 to 2034 to touch US$851.46 billion, according to Precedence Research. While North America held over ~36.90% of the market share in 2023, the Asia Pacific market is anticipated to expand at the fastest CAGR of ~19.8% between 2024 and 2034.
The increased demand for automated and technologically advanced hardware and software products throughout end-use verticals, along with favorable government policies, continues to encourage the industries in North America to adopt Al. Over the past few years, significant investments by the tech giants in R&D fuelled technological advancements in various industries. Rapid penetration of digital technologies and the internet continue to contribute to the strong outlook for the global artificial intelligence market.
Latest Trends and Themes About Al
The 2 most important trends that stood out in 2023 were generative Al and electrification and renewables. As per McKinsey, the former saw a spike of ~700% in Google searches from 2022 to 2023, together with a strong increase in job postings and investments. This highlights the pace of technological innovation. Between 2023 and 2024, the size of the prompts that large language models (LLMs) can process, also known as “context windows,” rose from 100,000 to 2 million tokens. Electrification and renewables were another trend that saw the highest investment and interest scores.
Even though several trends saw lower investment and hiring in 2023, experts believe that the long-term outlook remains strong. The continued focus on innovation by the enterprises and elevated interest in harnessing such technologies continue to demonstrate strong future growth prospects.
Innovation has widely been accepted in 3 trends, that form part of the “Al revolution” group. These include generative Al, Applied Al, and Industrializing machine learning. While Gen Al helps in creating new content from unstructured data (like text and images), applied Al helps in leveraging ML models for analytical and predictive tasks. Finally, industrializing machine learning ramps up and derisks the development of machine learning solutions. McKinsey reported that Applied Al and industrializing machine learning, aided by strong interest in gen Al, saw significant uptick in innovation. This was reflected in the surge in publications and patents between 2022 to 2023.
At the same time, electrification and renewable energy technologies are capturing strong interest, demonstrated by the news mentions and web searches. Their popularity stems from a surge in global renewable capacity, critical roles in global decarbonization efforts, and heightened requirements of energy security amid geopolitical tensions and energy crises.
Potential for Artificial Intelligence- Applied Al, Industrializing Machine Learning, and More
The impact of analytical Al technologies, such as applications of machine learning (ML), computer vision, and natural language processing (NLP), has been growing throughout sectors. McKinsey research believes that Al applications have the potential to unlock an economic value of $11 trillion – $18 trillion annually.
The Regulators and policymakers continue to take note of Al’s increasing impact. For example, the European Parliament passed the unified EU Artificial Intelligence Act. Regarding real-life uses, Saudi Aramco was able to develop an Al hub to efficiently analyze over 5 billion data points per day from wellheads in the oil and gas fields.
Industrializing machine learning (ML), widely known as machine learning operations (MLOps), refers to the process of scaling and maintaining ML applications within enterprises. MLOps remain critical in developing, deploying, and maintaining gen Al solutions. This will enable ML algorithms to be dispatched quickly and effectively. Some sectors which are adopting industrialized ML practices are energy and materials and technology, media, and telecommunications.
Our methodology
To list the 10 Worst Artificial Intelligence Stocks Under $50 According to Short Sellers, we added 20 AI tickers to the Finviz screener and sorted them by short interest. Next, we narrowed our list of stocks by selecting the ones having high short interest and share prices below $50. Finally, the stocks were ranked in ascending order of their short interest.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
10 Worst Artificial Intelligence Stocks Under $50 According to Short Sellers
10) Infosys Limited (NYSE:INFY)
Share Price as of September 20: $22.85
Short % of Float (As of August 30): 2.01%
Number of Hedge Fund Holders: 19
Infosys Limited (NYSE:INFY) provides consulting, technology, outsourcing, and next-generation digital services. Infosys Applied Al, which is a part of Infosys Topaz, supports enterprises in adopting a comprehensive approach and roadmap to scale enterprise-grade Al for businesses.
Short sellers believe that Infosys Limited (NYSE:INFY)’s stock price might witness some pressure moving forward as a result of persistent discrepancies between bookings and revenue. The gap is mainly because of ongoing weakness in discretionary spending, which might negatively impact its financial performance. Apart from this, a major contract re-scoping in the BFSI sector might also act as a critical headwind.
Moreover, Infosys Limited (NYSE:INFY) remains cautious about the sustainability of the recovery in the broader financial services sector. Also, retail sector challenges are still present as a result of the macroeconomic environment. The short sellers expect that discretionary business continues to be challenging, and no major change is expected in client behavior in the energy, utilities, or manufacturing sectors.
On the other hand, Wall Street analysts believe that Infosys Limited (NYSE:INFY) should primarily benefit from switching costs, intangible assets, and a cost advantage. Market experts believe that its foray into higher-value industrial engineering should help it achieve substantial growth trends in the IT services industry. Infosys Limited (NYSE:INFY)’s investments in digital and Al capabilities, together with positive outcomes from Project Maximus, demonstrate a strong and steady path forward for the current financial year.
While Infosys Limited (NYSE:INFY) revised its revenue growth guidance to 3%-4% in constant currency for FY 2025, the company was able to secure 34 large deals with a total contract value of $4.1 billion. The company’s ongoing investments in enterprise-generative Al should strengthen its capability.
Insider Monkey’s 2Q 2024 database revealed that Infosys Limited (NYSE:INFY) was held by 19 hedge funds.
9) DigitalOcean Holdings, Inc. (NYSE:DOCN)
Share Price as of September 20: $43.23
Short % of Float (As of August 30): 10.22%
Number of Hedge Fund Holders: 19
DigitalOcean Holdings, Inc. (NYSE:DOCN) operates a cloud computing platform in North America, and internationally. Recently, the company announced the acquisition of cloud infrastructure and AI software provider, Paperspace.
The short sellers opine that the pace of net new ARR is expected to moderate during 3Q 2024 and 4Q 2024 mainly due to the supply chain risks and additional capacity. Also, the slower growth in customer expansion might be a matter of concern. DigitalOcean Holdings, Inc. (NYSE:DOCN) continues to face challenges of investments in AI technologies, while managing its FCF, especially given the need for debt refinancing over the next 2 years. DigitalOcean Holdings, Inc. (NYSE:DOCN) might witness growth challenges as a result of a weakening market for small and medium-sized businesses and the expectations of higher capital expenditure to support AI growth. Collectively, these factors might impact its FCF.
On the other hand, market experts believe that DigitalOcean Holdings, Inc. (NYSE:DOCN)’s scalable business model and higher ARPU and NDR demonstrate strong growth potential and effective customer retention strategies. In 2Q 2024, its artificial intelligence (AI) and machine learning products saw a significant 200% growth in annual recurring revenue (ARR), reflecting strong demand for its products. DigitalOcean Holdings, Inc. (NYSE:DOCN) continues to expand its AI offerings and infrastructure, given the launch of GPU droplets and the announcement of a new data center in Atlanta, which is slated to open in 1Q 2025.
DigitalOcean Holdings, Inc. (NYSE:DOCN) focuses on driving product innovation, ecosystem growth, and revenue. Given its introduction of GPU droplets and plans to release endpoint APIs for open-source models, the company continues to cater to a growing demand for AI capabilities in customer workflows.
Stifel Nicolaus upped the shares of DigitalOcean Holdings, Inc. (NYSE:DOCN) from $32.00 to $35.00, giving a “Hold” rating on 9th August. At the end of 2Q 2024, 19 hedge funds tracked by Insider Monkey held stakes in DigitalOcean Holdings, Inc. (NYSE:DOCN).
8) Fastly, Inc. (NYSE:FSLY)
Share Price as of September 20: $7.23
Short % of Float (As of August 30): 11.03%
Number of Hedge Fund Holders: 23
Fastly, Inc. (NYSE:FSLY) is engaged in operating an edge cloud platform for processing, serving, and securing customer applications in the US and internationally. Fastly AI Accelerator is its first AI solution which has been designed to create a better experience for developers by helping to improve performance and reducing costs across the use of similar prompts for LLM apps.
Bears believe that Fastly, Inc. (NYSE:FSLY)’s stock is expected to be pressured by its near-term risks such as decelerating growth in the company’s largest customers and share loss in delivery. Also, Fastly, Inc. (NYSE:FSLY) has been experiencing pricing pressure in its delivery business. The expected weakness, mainly in the top 15 customers, is primarily attributed to lower renewal rates not being accompanied by historical traffic increases.
Also, the company’s largest customers do not have minimum commitments embedded in contracts. This increases the risk of traffic being diverted to lower-cost providers.
However, Wall Street analysts believe that Fastly, Inc. (NYSE:FSLY)’s modern version of a content delivery network remains superior to legacy competitors’ and should be preferred by developers. Moreover, the company continues to actively pursue restructuring to reduce costs, anticipating to save $14 million in operating expenses in 2H 2024. Fastly, Inc. (NYSE:FSLY) aims to achieve breakeven operating income and FCF by 2025. While Fastly, Inc. (NYSE:FSLY) continues to invest in go-to-market strategies and technology innovation to support long-term growth and profitability, it also remains focused on diversifying its customer base. Also, the company continues to implement a new engagement strategy, focused on driving additional commitments from customers.
As of the close of 2Q 2024, 23 hedge funds held stakes in Fastly, Inc. (NYSE:FSLY), as per Insider Monkey’s database.
7) Asana, Inc. (NYSE:ASAN)
Share Price as of September 20: $11.92
Short % of Float (As of August 30): 11.50%
Number of Hedge Fund Holders: 23
Asana, Inc. (NYSE:ASAN) operates a work management platform, focused on individuals, team leads, and executives in the US and internationally. The company launched Asana AI, bringing powerful generative AI features such as smart status updates, smart summaries, and smart chat.
Bears believe that the company’s stock price is expected to be impacted mainly due to concerns around elevated customer budget scrutiny along with elongated sales cycles delaying deal execution. Additionally, increased economic uncertainty and shifts in market dynamics might weigh over Asana, Inc. (NYSE:ASAN)’s performance moving forward. Next, Asana, Inc. (NYSE:ASAN)’s net revenue retention declined below 100%. This means that its customers are spending less on its products. The company noted that a large number of customers have been renewing with lower commitments. Therefore, growth reacceleration might be a matter of concern in the near term. Additionally, there are concerns about the departure of its CFO Tim Wan.
That being said, Wall Street analysts remain optimistic about the company’s future growth prospects amidst its transition to the enterprise market and the development of Asana AI. Additionally, Asana, Inc. (NYSE:ASAN) continues to prepare to pursue FedRAMP certification which will help the company expand into government agencies and regulated industries. While Asana, Inc. (NYSE:ASAN) focuses on expanding its enterprise tiers with high-value functionality for strong growth, it expects revenue from Asana AI Studio in the early quarters of the upcoming year.
Asana, Inc. (NYSE:ASAN) continues to enjoy a strong renewal base, and it is confident about the deal conversions for 4Q 2024. Finally, the company’s focus on the enterprise market and AI development should act as primary tailwinds. Asana, Inc. (NYSE:ASAN) focuses on improving the post-sales experience and streamlining its sales processes. These measures, along with leveraging AI products, should drive long-term growth.
As per Wall Street analysts, the shares of Asana, Inc. (NYSE:ASAN) have an average price target of $13.83. Asana, Inc. (NYSE:ASAN) was a popular stock among hedge funds at the end of Q2 2024 with hedge fund positions coming at 23, according to Insider Monkey’s database.
6) Paycor HCM, Inc. (NASDAQ:PYCR)
Share Price as of September 20: $14.02
Short % of Float (As of August 30): 12.28%
Number of Hedge Fund Holders: 20
Paycor HCM, Inc. (NASDAQ:PYCR) is engaged in the provision of human capital management (HCM) solutions for small and medium-sized businesses (SMBs) mainly in the US. Paycor AI Smart Sourcing helps in reducing time-to-hire by sourcing both active candidates and passive candidates.
The short sellers anticipate the challenging environment for Paycor HCM, Inc. (NASDAQ:PYCR) amidst growth concerns related to the annual form filing and Employee Retention Tax Credit (ERTC) revenues. They believe that, over the near term, the company might face headwinds due to the uncertain macroeconomic environment and recent changes in its sales organization. As a result of pressure from form filings, Paycor HCM, Inc. (NASDAQ:PYCR) is expecting a gross profit margin decline moving forward. Moreover, revenue growth is anticipated to decelerate in 2025 primarily because of a slowdown in interest income and macroeconomic factors.
On the other hand, Wall Street believes that Paycor HCM, Inc. (NASDAQ:PYCR) should be aided by its embedded HCM offering, which might double in revenue contribution in FY 2025. Moreover, the company remains optimistic and continues to expect margin expansion and ongoing growth in the embedded channel. Notably, new partnerships should contribute to growth in 2025.
Paycor HCM, Inc. (NASDAQ:PYCR)’s growth strategy consists of expanding its charge per employee per month and increasing platform users. As per Wall Street, it is well-placed to capture increased market share from regional service bureaus and legacy providers in the cloud payroll industry. The company’s optimistic outlook is supported by its focus on innovation and customer satisfaction, mainly via AI and new partnerships. Experts believe that there are significant opportunities in the HCM market, and Paycor HCM, Inc. (NASDAQ:PYCR) should be able to capture those considering its focus on product portfolio expansion and cross-selling efforts.
As per Wall Street analysts, the shares of Paycor HCM, Inc. (NASDAQ:PYCR) have an average price target of $17.75. Paycor HCM, Inc. (NASDAQ:PYCR) was a part of 20 hedge fund portfolios at the end of 2Q 2024.
Conestoga Capital Advisors, an asset management company, released its second-quarter 2024 investor letter. Here is what the fund said:
“Paycor HCM, Inc. (NASDAQ:PYCR): PYCR faced challenges this quarter, stemming from a now-reversed sales force restructuring and lowered guidance due to pressure on existing customer seat usage. Despite these setbacks, the demand for modern payroll and HR solutions has remained solid, driven by increasingly complex workforce requirements. PYCR maintains a competitive edge in the market, and sales are poised to rebound in coming quarters as their sales force gains productivity. With a robust pipeline of growth opportunities and the underlying business need unchanged, Paycor is well-positioned to capitalize on the evolving HR technology landscape.”
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 2nd 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.”
4) Klaviyo, Inc. (NYSE:KVYO)
Share Price as of September 20: $34.04
Short % of Float (As of August 30): 13.37%
Number of Hedge Fund Holders: 23
Klaviyo, Inc. (NYSE:KVYO) offers a software-as-a-service platform in the US, other Americas, the Asia-Pacific, Europe, the Middle East, and Africa. Klaviyo AI, complete with industry-leading features, helps businesses to see revenue-driving opportunities.
As of 30 August, Klaviyo, Inc. (NYSE:KVYO)’s short % of float stood at ~13.37%. The short sellers believe that the company’s stock price is likely to remain under pressure mainly due to the expected further net revenue retention (NRR) degradation along with a lack of growth in total logo additions. Klaviyo, Inc. (NYSE:KVYO) continues to face potential obstacles in its gross margins, with a decline expected in 4Q 2024. This is because of SMS marketing efforts’ growth and seasonal nature.
On the other hand, Wall Street believes that Klaviyo, Inc. (NYSE:KVYO) should be able to continue its strong growth trajectory mainly due to the strength in its upmarket strategy. Next, the Europe, Middle East, and Africa (EMEA) region, which remains a tough market for software companies, supported Klaviyo, Inc. (NYSE:KVYO), courtesy of product enhancements like language localization and increased SMS features.
Market experts believe that Klaviyo, Inc. (NYSE:KVYO)’s operating margin is expected to remain stable moving forward due to its strategic investments in sales capacity and product strategy development. The company’s competitive advantage revolves around its strong capabilities around data, which should help it achieve healthy revenue growth. Klaviyo, Inc. (NYSE:KVYO) announced a collaboration with TikTok, and it is focused on integrating its customer segmentation tools with this social media platform. This collaboration should help the company streamline ad targeting and improve relationships with potential buyers. The company’s expansion into SMS in 9 countries, together with the rollout of new features like multi-account management systems, should help improve market share.
Needham & Company LLC restated a “Buy” rating on the shares of Klaviyo, Inc. (NYSE:KVYO), issuing a price target of $40.00 on 4th September. The number of hedge funds tracked by Insider Monkey owning stakes in Klaviyo, Inc. (NYSE:KVYO) increased to 23 in 2Q 2024, from 22 in the previous quarter.
3) Bitdeer Technologies Group (NASDAQ:BTDR)
Share Price as of September 20: $7.13
Short % of Float (As of August 30): 13.40%
Number of Hedge Fund Holders: 15
Bitdeer Technologies Group (NASDAQ:BTDR) works as a technology company for blockchain and computing. Recently, Bitdeer AI announced the roll-out of its advanced AI Training Platform.
The short sellers continue to remain bearish on Bitdeer Technologies Group (NASDAQ:BTDR) mainly because of its weaker-than-expected financial performance in 2Q 2024, with revenue sitting at $99.2 million. This remained below the consensus estimate of $108.4 million. The company has been facing challenges in several key areas, such as cloud hash rate services and general hosting operations. Bitdeer Technologies Group (NASDAQ:BTDR)’s performance might also be impacted as a result of operational inefficiencies and increased competition.
The company’s cloud hash rate revenue fell by 33% in the quarter, as broader market conditions led to changes in the number of active orders and a decline in electricity subscriptions amid reduced margins due to the Bitcoin halving event in April.
That being said, Wall Street analysts believe that Bitdeer Technologies Group (NASDAQ:BTDR) should be aided by strategic direction in the semiconductor space along with potential contribution to the infrastructure of next-gen AI and HPC data centers. Market experts are optimistic about the company’s advancements in SEAL bitcoin mining chips and SEALMINER mining rigs. Bitdeer Technologies Group (NASDAQ:BTDR)’s strategic moves are focused on enhancing mining capabilities and expanding its market presence with the help of its mining equipment, which should continue to drive revenue growth.
Wall Street remains optimistic about the company’s expansion plans. Bitdeer Technologies Group (NASDAQ:BTDR) announced growth plans, with several expansions expected through 2025 end. It secured a 570-megawatt (MW) lease agreement with the Monroe County Port Authority, aiding its power capacity.
Analysts at Benchmark reaffirmed a “Buy” rating on the shares of Bitdeer Technologies Group (NASDAQ:BTDR), setting a price target of $16.00 on 13th August. Of the 912 elite money makers in our database, 15 hedge funds owned stakes in the company.
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).
1) C3.ai, Inc. (NYSE:AI)
Share Price as of September 20: $23.25
Short % of Float (As of August 30): 28.69%
Number of Hedge Fund Holders: 18
C3.ai, Inc. (NYSE:AI) carries out operations as an enterprise artificial intelligence (AI) software company in North America, and internationally.
Short sellers believe C3.ai, Inc. (NYSE:AI) has concerns about its ability to accelerate growth. The key area of concern remains the slowdown in subscription revenue growth. It saw a growth of only 20% YoY in 1Q 2025 to $73.5 million compared to a ~41% jump in the previous quarter. This deceleration weighed over the company’s stock performance, mainly in the context of tightening corporate budgets for IT and software amid macroeconomic concerns. This also highlights the risks and challenges in expanding the customer base and converting its pilot programs to long-term contracts.
C3.ai, Inc. (NYSE:AI)’s optimistic outlook has not been translated into consistent and scalable revenue. C3.ai, Inc. (NYSE:AI) expects short-term pressure on gross margins as a result of the increased cost of pilot programs. Moreover, the investments to scale the business might impact its operating margins in the near term.
On the other hand, Wall Street analysts continue to remain optimistic about the company’s growth prospects. They believe that the deceleration in the subscription revenue growth appears to be temporary and that the focus should be on revenue growth. In 1Q 2025, its total revenue came in at $87.2 million, exhibiting an increase of 21% compared to $72.4 million a year ago. This marks 6th consecutive quarter of accelerating revenue growth, pointing to the growing adoption of its enterprise AI offerings.
C3.ai, Inc. (NYSE:AI) has made significant strides when it comes to expanding its footprint throughout the public sector. The company signed 25 agreements with the state and local governments. Its federal business continues to do well, as the segment represented more than 30% of its bookings. The company made a new and expanded deal with the US military. The launch of C3 Generative AI for government programs demonstrates the likelihood of strong growth.
Northland Securities upped the shares of C3.ai, Inc. (NYSE:AI) from a “Market-perform” rating to an “Outperform” rating, giving a price target of $35.00 on 30th May. The company was held by 18 hedge funds, as per Insider Monkey’s 2Q 2024 data.
Investment management company, Bireme Capital, recently released its fourth-quarter 2023 investor letter. Here is what the fund said:
“Our final new short position is in a company called C3.ai, Inc. (NYSE:AI). Originally named “C3 Energy,” C3.ai has changed its name multiple times based on whatever hot new trend they were supposedly capitalizing on. The “energy” theme was about smart grid and cap-and-trade. Then the firm changed its name to “C3 IoT” to attempt to capitalize on the Internet of Things buzz. After that trend fizzled out, the moniker was altered once more, with the company capturing the “AI” ticker in December 2020 – a savvy move if it wants to sell stock to credulous investors, but irrelevant to its business prospects. As Kerrisdale put it, the company is a “minor, cash burning consulting and services business masquerading as a software company.”
While we acknowledge the potential of AI as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued AI stock that is more promising than the ones mentioned on our list but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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