Bubble In These 10 AI Stocks Accelerated Last Week

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Of the 120 artificial intelligence or AI-related stocks only 10 are in what could be referred to as a bubble. This article identifies them and list their performances last week, in descending order, and since the bubble began to inflate.

What is the AI Bubble?

According to Investopedia, a bubble is in place when "shares rise rapidly in price, often out of proportion to the companies' fundamental value." A specific percentage increase necessary for stocks to be considered to be in a bubble is not provided. The Global X Artificial Intelligence & Technology ETF (AIQ), which invests in 92 of the 120 AI companies, is UP 26.5% since April 25th, 2023 when the sector first began to jump in price, so in this article I have taken the liberty of defining a stock bubble as an increase of 50% or more from that date.

Please note that all the following companies have market capitalizations well in excess of $1B except Rekor Systems which only has a market cap of approximately $165M.

  1. Upstart Holdings (UPST): UP 26.8% last week; UP 234.7% since April 28th
    • Sector: Financials
    • Description: operates a cloud-based AI lending platform which aggregates consumer demand for loans and connects it to its network of AI-enabled bank and credit union partners
    • Short Interest: 37.9% A high short interest signals that investors have become more bearish and may be getting ready to sell and, as such, that it may be time to liquidate a long position.
  2. Super Micro Computer (SMCI): UP 13.6% last week; UP 180.2% since April 28th
    • Sector: Information Technology
    • Description: develops and manufactures high performance server and storage solutions which it provides to enterprise data centers, cloud computing, artificial intelligence, and 5G and edge computing markets
    • Short Interest: 10.2%
  3. Advantest (ATEYY): UP 10.6% last week; UP 102.8% since April 28th
    • Sector: Information Technology
    • Description: headquartered in Japan, ATELLY manufactures automatic test and measurement equipment used in the design and production of semiconductors for applications including artificial intelligence
    • Short Interest: Not Available
  4. Rekor Systems (REKR): UP 7.5% last week; UP 125.6% since April 28th
    • Sector: Information Technology
    • Description: leverages AI, machine learning, and holistic data to support the intelligent infrastructure for transportation management, public safety, and urban mobility markets
    • Short Interest: 7.5%
  5. Marvell Technology (MRVL): UP 7.3% last week; UP 60.7% since April 28th
    • Sector: Information Technology
    • Description: manufactures custom application-specific integrated circuits to enable the next generation of AI accelerator solutions for the data center and automotive markets.
    • Short Interest: 2.3%
  6. Symbotic (SYM): UP 7.1% last week; UP 66.1% since April 28th
    • Sector: Industrials
    • Description: provides a A.I.-powered robotic technology platform to improve efficiency for retailers and wholesalers
    • Short Interest: 15.2%
  7. Nvidia (NVDA): UP 7.0% last week; UP 63.9% since April 28th
    • Sector: Information Technology
    • Description: provides data center platforms and systems for AI including autonomous driving development agreements, and autonomous vehicle solutions
    • Short Interest: 1.1%
  8. Palantir Technologies (PLTR): UP 6.9% last week; UP 111.6% since April 28th
    • Sector: Information Technology
    • Description: builds and deploys software platforms utilizing AI for the intelligence community in the United States to assist in counterterrorism investigations and operations
    • Short Interest: 7.4%
  9. Tesla (TSLA): UP 2.6% last week; UP 71.2% since April 28th
    • Sector: Consumer Discretionary
    • Description: develops and deploys autonomy at scale in vehicles, robots, and more, based on advanced AI for vision and planning, supported by efficient use of inference hardware
    • Short Interest: 3.5%
  10. C3.ai (AI): DOWN 5.1% last week; UP 108.9% since April 28th
    • Sector: Information Technology
    • Description: provides an application development and runtime environment that enables customers to design, develop, and deploy enterprise AI applications and offers integrated turnkey enterprise AI applications for oil and gas, chemicals, utilities, manufacturing, financial services, defense, intelligence, aerospace, healthcare, and telecommunications markets
    • Short Interest: 37.9%

The above 10 stocks were UP 8.0%, on average, last week, are now UP 91.3% since the end of April and UP 181.9% YTD.

A Comparison

  • The Nasdaq was UP 3.3% last week, is UP 19.6% since the end of April and is UP 34.8% YTD.
  • The Global X Artificial Intelligence & Technology ETF (AIQ) was UP 4.9% last week, is UP 26.5% since the end of April, and is UP 44.3% YTD.

Conclusion 

It is evident from the above that the top 10 AI stocks continue in bubble mode and, according to the Bank of America, this "baby bubble" should continue until such time as the Fed pauses their rate hikes and then starts to raise rates again. The performances of the above stocks will be closely monitored on a weekly basis and be reported in future articles.


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Disclosure: None

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