10 Worst Small Cap AI Stocks To Buy According to Short Sellers

8. UiPath Inc. (NYSE:PATH)

Short % of Shares Outstanding As of August 30: 5.03%

Market Capitalization as of September 14: $6.76 billion

Number of Hedge Fund Holders: 29

UiPath Inc. (NYSE:PATH) provides AI-powered and robotic process automation (RPA) software. RPA technology, together with AI capabilities, automates repetitive, rule-based tasks, making it a valuable tool for organizations seeking to optimize their workflows.

Usually, automation software like RPA faces competition from AI-based tools, as these tools can do similar things without needing much programming. However, UiPath Inc. (NYSE:PATH) uses AI to make its automation software even better, leveraging AI to understand and manage tasks, documents, and communications.

For instance, a Central American financial institution used its automation to reduce transaction clarifications from 8 days to 1 and shift over 50% of customers online. They also used it to onboard 500,000 new clients per year and are now piloting IDP for unstructured documents using generative classification, extraction, and validation capabilities.

Revenue for the second quarter of fiscal year 2025 was $316.25 million, beating Street estimates by 12.51 million, exhibiting a growth of 10.07% year-over-year. The quarter ended with an ARR of $1.551 billion, up 19%, driven by a net new era of $43 million.

The company now has ~10,810 customers, including some new ones like IXM, Veness, Masson Associates, and Piedmont Healthcare. It has 2,163 customers spending $100,000+ and 293 spending $1 million+.

The company’s success depends on serving its customers and focusing on ensuring successful implementation, improving communication, and aligning teams with customer needs. It recently launched new Genii-powered features, including specialized LLMs for IDP and GenAI activities, and Autopilot for developers and testers. All of these expansion strategies position the company for long-term growth.