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

1. Enovix Corporation (NASDAQ:ENVX)

Number of Hedge Fund Holders: 22

Short Interest: 26.8%

Enovix Corporation (NASDAQ:ENVX) is an electrical components and equipment company based in Fremont, California. It produces lithium-ion batteries, which are used to power wearables and portable networking devices, including AR/VR devices and accessories.

One of the key reasons why investors dislike Enovix Corporation (NASDAQ:ENVX) is because it has high operating expenses, which is a cause for concern over the company’s free cash flow. In its second-quarter results, operating expenses for the company were shown to have increased to $88.1 million, primarily because of restructuring costs. This surge also resulted in Enovix Corporation (NASDAQ:ENVX) suffering a GAAP net loss of $115.9 million, which has also taken a hit on investor confidence.

Enovix Corporation (NASDAQ:ENVX) shares have also fallen by 19.9% year-to-date, which shows volatility in share price that most investors are unwilling to put up with. Additionally, the fact that the effectiveness and profitability of the company’s silicon anode tech is still largely untested means that many investors are unwilling to take a risk by investing in Enovix Corporation (NASDAQ:ENVX) shares until the company proves the viability of its tech at a commercial scale.

There were 22 hedge funds long Enovix Corporation (NASDAQ:ENVX) in the second quarter, with a total stake value of $153.2 million.

While AR is an exciting area to consider investing in, albeit carefully, we believe that AI stocks hold great promise for delivering high returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than the ones mentioned in 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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