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Introduction

Tech stocks - large and small - plummeted last week after the ISM manufacturing index reported August figures that came in below consensus expectations raising fears about the strength of the economy and increasing chances that the Federal Reserve will cut interest rates.

Our Micro/Small Cap AI Stocks Portfolio

Below are how the 10 largest micro/small AI stocks (i.e., stocks with market capitalizations above $100M but less than $2B) performed w/e Sept. 6th, in all of August and YTD and the extent of their short interest which, simply put, is a measure of how many investors are betting that a stock's price will fall.

1. Applied Optoelectronics (AAOI): UP 4.1% last week; UP 18.8% in August; DOWN 38.9% YTD
   • AAOI provides fiber-optic access network products for the cable broadband, internet data center, telecom, and fiber-to-the-home markets.
   • Market Capitalization: $483M
   • Short Interest: 25.4%
2. Verses AI (VRSSF): DOWN 7.7% last week; DOWN 20.7% in August; DOWN 39.1% YTD
   • VRSSF offers a voice and text-based personal AI assistant designed to learn about its users in order to better organize, manage, and optimize their digital life.
   • Market Capitalization: $105M
   • Short Interest: N/A
3. Evolv Technologies (EVLV): DOWN 8.4% last week; UP 13.5% in August; DOWN 23.5% YTD 
   • EVLV screens people for threats without sacrificing the visitor experience.
   • Market Capitalization: $569M
   • Short Interest: 8.6%
4. Rekor Systems (REKR): DOWN 8.8% last week; DOWN 33.1% in August; DOWN 65.8% YTD
   • REKR leverages AI, machine learning, and holistic data to support the intelligent infrastructure for smart mobility.
   • Market Capitalization: $101M
   • Short Interest: 19.0%
5. Digimarc Corporation (DMRC): DOWN 10.0% last week; DOWN 10.3% in August; DOWN 28.5% YTD
   • DMRC software provides digital identifiers designed to address counterfeiting, product authenticity, recycling accuracy, and supply chain traceability.
   • Market Capitalization: $551M
   • Short Interest: 9.2%
6. SoundHound AI (SOUN): DOWN 11.0% last week; DOWN 3.9% in August; UP 105.2% YTD
   • SOUN offers voice AI solutions that let businesses offer conversational experiences to their customer in 25 different languages.
   • Market Capitalization: $1,560M
   • Short Interest: 23.8%
7. D-Wave Quantum (QBTS): DOWN 12.9% last week; UP 1.0% in August; Unchanged YTD
   • develops and delivers quantum computing systems, software, and services worldwide.
   • Market Capitalization: $177M
   • Short Interest: 10.2%
8. Rigetti Computing: (RGTI): DOWN 18.5% last week; DOWN 10.7% in August; UP 56.3% YTD
   • RGTI builds quantum computers and the superconducting quantum processors.
   • Market Capitalization: $144M
   • Short Interest: 15.1%
9. Innodata (INOD): DOWN 18.6% last week; DOWN 10.7% in August; UP 72.9% YTD 
   • INOD provides AI-enabled software platforms and managed services for AI data annotation, AI digital transformation, and industry-specific business processes.
   • Market Capitalization: $408M
   • Short Interest: 11.2%
10. BigBear.ai (BBAI): DOWN 18.9% last week; UP 5.3% in August; DOWN 39.7% YTD
    • provides AI and machine learning to assist customers in aggregating, interpreting, and synthesizing data to enable real-time decision-making capabilities.
    • Market Capitalization: $323M
    • Short Interest: 8.4%

Summary

Our Micro/Small Cap AI Stocks Portfolio was DOWN 10.0% last week, went DOWN 5.4% during August  and is now DOWN 16.4% YTD. The average market capitalization of the 10 constituents is $442M.

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