Stocks to sell

3 Doomed AI Stocks to Dump Before They Dive: February 2024

Artificial intelligence (AI) continues to be a major catalyst for the stock market. Most of the growth in the market continues to be concentrated in securities of technology companies, in particular those that are involved in AI. New products for consumers and businesses that incorporate AI are being rolled out at a lightning-fast rate, and demand for the microchips and semiconductors that power AI applications remains red hot.

The market for AI is forecast to reach more than $2.5 trillion by 2032. Consumers, investors and analysts seem to be all-in on the technology, pushing AI stocks to new heights. But amidst the current euphoria, there are a number of AI stocks that are struggling and not sharing in the growth. These are the shares of companies that are emerging as losers in the AI race. Here are three doomed AI stocks to dump before the dive. (AI)

Source: Alexander Limbach / Shutterstock

The shine has come off of last year’s AI stock darling (NYSE:AI). Since hitting a 52-week high of $48.87 last summer,’s share price has been cut by almost half. So far in 2024, AI stock has dropped 16% even as most other stocks associated with the breakthrough technology continue to rally. It’s a big comedown for a stock that seemed invincible this time last year and was benefitting from the fact that its ticker symbol is “AI.”

What has brought’s stock lower has been disappointing financial results and mounting losses at the company that specializes in enterprise AI. This past December, AI stock plunged 12% in a single trading session after the company issued weak forward guidance. Specifically, the company forecast an operating loss of $46 million for the current first quarter of 2024. That was more than double the loss of $21.1 million expected on Wall Street. also withdrew its forecast of achieving profitability by year’s end.

Super Micro Computer (SMCI)


The stock of Super Micro Computer (NASDAQ:SMCI) is rising so far, so fast that it looks to be out of control. In the last 12 months, SMCI stock has increased 650%, including a 120% gain so far this year. The share price is routinely growing by 8% to 15% a day. This kind of growth rarely ends well for investors. And while Super Micro Computer isn’t a meme stock, its trading pattern is beginning to resemble one. You only need to look at the aforementioned to see how quickly a fast-growing stock can deflate.

SMCI stock has been on fire since the company, which is one of the largest producers of high-performance and high-efficiency servers, struck a deal with chipmaker Nvidia (NASDAQ:NVDA) last year. In January, the company upgraded its earnings projections for the year ahead based on strong and growing demand for its servers, sending the stock into overdrive. While the gains have been impressive, Super Micro Computer’s share price could dive any day now and the drop could be steep.

Baidu (BIDU)

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Among the world’s leading AI developers, China’s Baidu (NASDAQ:BIDU) is trailing the pack. The technology giant has struggled to convince analysts and investors of its AI prowess ever since it unveiled its AI system called “Ernie Bot” which it claimed rivaled Chat-GPT in terms of its power and sophistication.

Many analysts openly question whether Baidu can get the microchips needed to run its advanced AI models and applications given the U.S. ban on exports of the most powerful chips and semiconductors to China. These doubts have weighed on BIDU stock, which has declined by 7% so far this year, bringing its 12-month decrease to 25%. Over the last five years, Baidu’s share price has declined nearly 40%, making this a doomed AI stock to dump before it dives even more.

On the date of publication, Joel Baglole held a long position in NVDA. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.

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