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

7. Verint Systems Inc. (NASDAQ:VRNT)

Short % of Shares Outstanding As of August 30: 6.98%

Market Capitalization as of September 14: $1.62 billion

Number of Hedge Fund Holders: 23

Verint Systems Inc. (NASDAQ:VRNT) is a technology company that sells products and services for customer experience automation and utilizes AI technology to enhance its offerings in areas like analytics, workforce optimization, and security.

Management at Verint Systems Inc. (NASDAQ:VRNT) believes that there’s a big opportunity to use AI in contact centers. Companies spend a lot on customer service, and they want AI bots that can help them make money, so this company offers a unique platform that can do this.

The company made $210.17 million in revenue in FQ2 2025, a decline of 0.11% from the same quarter the prior fiscal year. This revenue was also $2.26 million less than analyst expectations but was able to give an earnings per share value of $0.49.

The revenue mainly came from new AI bookings, which increased over 40% in FQ2 year-over-year. Bundled SaaS revenue driven by AI was up 15% year-over-year.

The company’s competitive advantage is its ability to quickly deliver AI solutions to large brands. It launched an Open Platform with 40 AI bots a year ago. Many customers are now seeing positive results and increasing their use of these bots. Over half of the largest customers (those generating at least $1 million ARR) have purchased at least 1 AI bot.

The company’s AI-powered solutions are demonstrating strong traction in the market, with customers achieving significant business outcomes, including increased agent capacity, fraud prevention, cost savings, and improved customer satisfaction. Verint Systems Inc.’s (NASDAQ:VRNT) ability to deliver tangible results positions it well for continued success in the contact center market.

Here is what Bernzott Capital has to say about Verint Systems Inc. in its Q2 2021 investor letter:

“Verint Systems (VRNT): Initiated in January 2014, we exited with an absolute and relative gain. The company is progressing in its business model transition to subscription-based sales, and took a step toward shareholder value enhancement with its spin-off of Cognyte Software earlier this year. We sold those shares in 1Q. As the share price approached fair value, we sold VRNT which also reduced the portfolio’s exposure to the Software sector, where we remain overweight.”