AI stocks have done well in 2023 as investors bet on the growing industry following the success of OpenAI’s ChatGPT. Most companies – and cryptocurrencies – with exposure to the industry have done well. Analysts have not been left behind, with most of them coming up with lists of their favorite AI shares.
The most popular AI stocks among investors include firms like Microsoft, Nvidia. Baidu, Tesla, and BigBear among others. Cryptocurrencies like SingularityNET and Fetch.ai have done well. However, in the past, such thematic investments have ended in huge losses. A good example of this is the sell-off in metaverse stocks in 2023.
C3.ai (NYSE: AI) has become one of the most popular artificial intelligence stocks in 2023. The company provides AI software and other tools for companies around the world. With its business solely in AI, most investors believed that the company will see more growth. As a result, the stock surged to a high of $30.91, which was 203% above the lowest level in December. Recently, the C3.ai stock price has plunged to about $20.
There is a likelihood that the stock will continue plunging in the coming months as investors who bought it because of FOMO retreat. Using the Fibonacci Retracement level, we can assume that the stock will plunge to $14.65, which is along the 78.6% retracement point. This makes it highly risky to buy C3.ai shares.
Buzzfeed (NASDAQ: BZFD) stock price went parabolic earlier this year when the company announced that it will use ChatGPT for its work. At the time, the stock surged to a high of $4.26, which was the highest level in months. Recently, however, the Buzzfeed stock price has plunged to the lowest level since January.
Investors have become aware of the risks to Buzzfeed. For one, recent data shows that ChatGPT can provide inaccurate answers. At the same time, the company could be penalized by Google Search, if it determines that it was using AI to create content. Most importantly, Buzzfeed’s core business is still struggling.
BigBear.ai (NYSE: BBAI) is another AI stock to short even after it has become a penny stock. The BBAI stock price surged to a high of $6.75 as companies in the industry jumped. It has now plunged to less than $3 and the situation could get worse in the near term. Like C3.ai, BigBear provides AI solutions to companies in all industries. Its key products include FutureFlow Rx, MedModel, ProModel, and Shipyard AI among others.
Palantir (NYSE: PLTR) has also been mentioned in the list of the best AI stocks to invest in. This, together with its stellar earnings, explains why the shares jumped to a high of $10.31 in February. Analysts believe that the company’s analytics products were among the first ones to embrace AI in the industry.
Palantir stock has plunged from $10 to $7.68 and there is a likelihood that the shares will continue plunging as this excitement wanes.