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

6. Synaptics Inc. (NASDAQ:SYNA)

Short % of Shares Outstanding As of August 30: 7.42%

Market Capitalization as of September 14: $2.98 billion

Number of Hedge Fund Holders: 20

Synaptics Inc. (NASDAQ:SYNA) is a technology company that specializes in human interface solutions, such as touchpads and touchscreens. It recently made a strategic shift towards edge AI, focusing on perceptive intelligence. AI-powered solutions enable devices to understand and respond to user interactions more intelligently.

Revenue for the company was $247.40 million in FQ4 2024, up 8.84% from FQ4 2023. This was slightly above the midpoint of the company’s guidance range with enterprise products incrementally above forecast.

Core IoT products are growing, led by wireless, growing 63% year-over-year. Synaptics Inc. (NASDAQ:SYNA) also recently developed a new device that is 50% more energy-efficient and 40% smaller than similar high-performance products. Operator solutions continue to generate revenue, with recent wins in Japan. Enterprise and automotive products grew 7% sequentially, driven by video interface and PC products.

The company gaining market share in PCs and seeing increased demand for AI-based devices. In mobile, it’s aligned with the high end of the Android market. It is also excited about its core IRT opportunity, particularly in processors and wireless. At the same time, automotive market softness is slowing new technology adoption.

Its new chip will be sampled soon, with revenue starting in mid-2025. The Wi-Fi 7 device is ahead of schedule. The Astra line of embedded AI processors is getting attention. Initial demand for Makina RDKs has been strong. The company has made its software widely available and is building partnerships to scale faster. It has also started sampling its SR series of smart MCUs for vision-based applications.

Synaptics Inc.’s (NASDAQ:SYNA) strong focus on innovation and expansion, coupled with growing demand for AI-powered solutions and emerging technologies, positions it well for continued success and growth.

TimesSquare Capital U.S. Small/Mid Cap Growth Strategy stated the following regarding Synaptics Incorporated (NASDAQ:SYNA) in its fourth quarter 2023 investor letter:

“Among the wide variety of Information Technology companies, we prefer critical system providers, specialized component designers, and systems that improve productivity or efficiency for their clients. A rebound in the PC and smartphone markets benefited Synaptics Incorporated (NASDAQ:SYNA), the developer of human interface technologies for a variety of devices. Synaptics’ revenues and earnings surpassed expectations thanks to that stabilization, and its management expects a further recovery in 2024. The company also won several new design mandates. That gave its shares a 28% lift.”