10 Worst Augmented Reality (AR) Stocks According to Short Sellers

3. InterDigital, Inc. (NASDAQ:IDCC)

Number of Hedge Fund Holders: 29

Short Interest: 20%

InterDigital, Inc. (NASDAQ:IDCC) is an application software company based in Wilmington, Delaware. It offers wireless, visual, AI, and related technologies. Within the AR space, the company offers the AR-Bot, a system for robot navigation, alongside several full-color meta-grating solutions for single waveguide-based AR/VR near-eye display systems.

With a short interest of 20%, InterDigital, Inc. (NASDAQ:IDCC) is a stock that many short sellers consider to be a bad investment. One of the reasons for this may be the fact that the company has been involved in costly litigation with other companies, usually over patent infringement and licensing negotiations. One such legal dispute that InterDigital, Inc. (NASDAQ:IDCC) is embroiled in presently is its litigation against Lenovo.

InterDigital, Inc. (NASDAQ:IDCC) has also faced revenue fluctuations in the past, primarily because a major portion of its revenue depends on licensing agreements with other tech companies. Legal disputes and the need for renewals of licensing agreements may thus also negatively impact InterDigital, Inc.’s (NASDAQ:IDCC) ability to ensure a consistent revenue stream.

InterDigital, Inc. (NASDAQ:IDCC) was spotted in the 13F holdings of 29 hedge funds in the second quarter, with a total stake value of $154.3 million.

First Pacific Advisors mentioned InterDigital, Inc. (NASDAQ:IDCC) in its first-quarter 2024 investor letter:

“InterDigital, Inc. (NASDAQ:IDCC) is a research and development organization that develops and acquires wireless and video patents across key technologies. The company has a history of strong financial performance, opportunistically buys back shares, and pays a modest dividend. IDCC has been successfully renewing its wireless licensing agreements (Apple in 2022, Samsung in 2023) and has a growing stream of recurring licensing revenues across consumer electronics, internet of things (IoT) and automotive customers. CEO Liren Chen joined IDCC in 2021 from Qualcom and has been hiring other former Qualcom managers. The company bought back $338m of stock last year and authorized another $300m buyback in its Q4 2023 earnings release.”