Image Source: Pixabay

The following artificial intelligence and related (AI&R) stocks remain in bubble mode (i.e. above 100% YTD) and are ranked below, in descending order, as to their stock performances YTD. In addition, price-to-sales (PSR) and price-to-earnings growth (PEG) valuation metrics that indicate that a stock is undervalued are noted as well as each stock's short interest percentage of shares that short-sellers have borrowed from the float and not yet covered are noted to convey the extent to which institutional short sellers believe the stock is overvalued.

1. Applied Optoelectronics (AAOI): up 594% YTD
   • Market Capitalization: $463M
   • Short Interest: 22.0% (High)
2. Symbotic (SYM): up 327% YTD
   • Market Capitalization: $29.8B
   • Short Interest: 19.0% (High)
3. IonQ (IONQ): up 257% YTD
   • Market Capitalization: $2.5B
   • Short Interest: 24.0% (High)
4. Super Micro Computer (SMCI): up 241% YTD
   • Market Capitalization: $15.2B
   • PSR: 1.4 (45% below sector mean of 2.6)
   • PEG ratio: 0.6 (66% below sector mean of 1.9)
   • Short Interest: 9.4%
5. Nvidia Corporation (NVDA): up 234% YTD
   • Market Capitalization: $1.2T
   • PEG ratio: 1.0 (47% below the sector mean of 1.9)
   • Short Interest: 1.1%
6. Palantir (PLTR): up 200% YTD
   • Market Capitalization: $41.8B
   • Short Interest: 8.0%
7. Meta Platforms (META): up 171% YTD
   • Market Capitalization: $869B
   • Short Interest: 1.5%
8. C3.ai (AI): up 161% YTD
   • Market Capitalization: $3.4B
   • Short Interest: 36.0% (Extremely High)
9. BigBear.ai Holdings (BBAI): up 155% YTD
   • Market Capitalization: $292M
   • PSR: 1.9 (29% below sector mean of 2.6)
   • Short Interest: 13.8%
10. Applied Digital Corporation (APLD): up 155% YTD
    • Market Capitalization: $455M
    • PSR: 1.5 (44% below sector mean of 2.6)
    • Short Interest: 23.6% (High)
11. Spotify Technology (SPOT): up 122% YTD
    • Market Capitalization: $35.4B
    • Short Interest: 1.5%
12. Innodata (INOD): up 121% YTD
    • Market Capitalization: $194M
    • Short Interest: 12.6%
13. Tesla (TSLA): up 118% YTD
    • Market Capitalization: $748B
    • Short Interest: 3.1%
14. Uber Technologies (UBER): up 118% YTD
    • Market Capitalization: $114 B
    • Short Interest: 2.3%
15. CrowdStrike (CRWD): up 104% YTD
    • Market Capitalization: $50.3B
    • Short Interest: 2.4%

Valuation Analysis

Based on the above analysis, only Super Micro Computer (SMCI) has valuation metrics that suggest that it is relatively undervalued. (This is not a recommendation, however, so please do your own research before taking any action is this regard.) High short selling interest as a percentage of float in C3.ai (36.0%), IonQ (24.0%), Applied Digital Corporation (23.6%), Applied Optoelectronics (22.0%) and Symbotic (19.0%) convey that institutional short sellers believe the stocks of those companies are overvalued (the same as last week) and a decline is anticipated.

Stock Performance Summary

The average YTD price change of the top 15 AI stocks, as indicated above, is now 205.3%.To put things in perspective, the AI sector, in total, as represented by the Global X Artificial Intelligence and Technology ETF (AIQ) consisting of 91 constituents, is only up 47.0% YTD.

Definitions

• The price-to-sales ratio (PSR) describes how much someone must pay to buy one share of a company relative to how much that share generates in revenue for the company. and, as such, determines whether its stock is cheap or overpriced in comparison to its peers. The mean forward sector ratio is considered excellent when the value falls below two (2). 
• The price/earnings to growth ratio (PEG ratio) is considered to be an indicator of a stock's true value. A PEG lower than 1.0 is best, suggesting that a company is relatively undervalued. 
• The short Interest is the percentage of shares that short-sellers have borrowed from the float and not yet covered. A short interest as a percentage of float above 20% is generally considered very high conveying that short-selling investors believe the stock's price is too high and that they hope they will be able to purchase the stock in the market at a lower price than they sold the shares short.

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