In this article, we will look at the 10 AI Bubble Stocks to Short Now According to Reddit.
According to a June 2 report by CNBC, Rick Rieder, BlackRock’s chief investment officer, remains relaxed, despite many investors raising concerns of an AI Bubble. Rieder oversees more than $2.4 trillion in assets. He told CNBC that the current market is extraordinary with momentum unlike anything he has seen before. While he acknowledges the uncertainty, he advises investors to stay invested in the market.
Rieder’s bullish sentiment is based on strong earnings. He noted that tech and semiconductor stocks actually have lower price-to-earnings ratios today than last October, while forward earnings growth has climbed above 20%. He added that for Mag 7 companies, the blended earnings growth is at around 27.6%, which makes the current multiples “not as scary” to buy. Rieder added that a large sum of capital remains on the sidelines, buyback activity is robust, and higher-yield portfolios generating 6% to 7% returns are compounding in ways that keep drawing investors back into equities. He highlighted that his firm is closely monitoring the concerns regarding return on invested capital for AI infrastructure. Rieder distinguished the AI market from the dotcom bubble, noting that today’s big spenders have solid cash flows, which backs the capital raises compared to the dotcom era.
With that, let’s take a look at the 10 AI Bubble Stocks to Short Now According to Reddit.
Our Methodology
To curate the list of 10 AI Bubble Stocks to Short Now According to Reddit, we used various Reddit threads that talked about AI stocks to Short. We cross-checked the short float values for the most mentioned stocks from Yahoo Finance and ranked the stocks in ascending order of the number of hedge fund holders sourced from Insider Monkey’s database. We have limited our final selection to companies that have recently reported noteworthy developments likely to impact investor sentiment.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Insider Monkey’s quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 599.2% since May 2014, beating its benchmark by 372 percentage points (see more details here).
10 AI Bubble Stocks to Short Now According to Reddit
10. SoundHound AI, Inc. (NASDAQ:SOUN)
Number of Hedge Fund Holders: 14
SoundHound AI, Inc. (NASDAQ:SOUN) is one of the AI Bubble Stocks to Short Now According to Reddit. SoundHound AI, Inc. (NASDAQ:SOUN) is among some of the most shorted stocks with a short float exceeding 38%. The stock has declined more than 16% since the release of fiscal Q1 2026 earnings on May 7. However, the Street continues to see significant upside, as 8 out of 10 analysts covering the stock have a Buy rating and the 12-month average price target reflects more than 67% upside from current levels.
During the fiscal first quarter of 2026, the company posted $44.2 million in revenue, reflecting a 52% year-over-year increase, and topped Wall Street’s expectation of $42.56 million. The EPS of negative $0.06 also fell short of the negative $0.03 consensus. Management noted the quarter to be strong, as excluding acquisitions, core automotive and IoT AI revenue surged 88%, reflecting organic demand across its key verticals.
However, the profitability remained weak as SoundHound posted a GAAP net loss of $25 million and an adjusted EBITDA loss of $26.7 million. Gross margins were also impacted by one-time vendor charges during the quarter, although management flagged these as non-recurring.
After the quarter, the company agreed to acquire LivePerson, with the combined company expected to create one of the most comprehensive enterprise AI footprints in conversational AI, serving 25 of the Fortune 100. Management sees a $500 million revenue opportunity and is targeting 2027 revenue of at least $350 million to $400 million.
SoundHound AI, Inc. (NASDAQ:SOUN) provides voice and conversational AI technology for automotive, restaurants, smart devices, customer service, healthcare, retail, financial services, and other enterprise markets.
9. Wolfspeed, Inc. (NYSE:WOLF)
Number of Hedge Fund Holders: 31
Wolfspeed, Inc. (NYSE:WOLF) is one of the AI Bubble Stocks to Short Now According to Reddit. On June 1, Wolfspeed, Inc. (NYSE:WOLF) announced an expansion in the data center market with a dedicated data center solutions team and a new regional office in the San Francisco Bay Area.
Management noted that this move is to take the company closer to hyperscalers and ODMs building next-generation AI infrastructure. Wolfspeed is one of the leaders in silicon carbide technology and noted high-voltage silicon carbide power solutions to be the core opportunity. Management highlighted that as AI computing scales dramatically, traditional data center power architecture needs to be fundamentally redesigned around higher voltages to minimize energy loss and maximize efficiency.
To lead the new data center solutions team, the company has hired two experienced executives, including Ganesh Srinivasan and Yogesh Ramadass. Ganesh Srinivasan joins as Senior Vice President, and Yogesh Ramadass as Vice President and Fellow.
The company has recently emerged from Chapter 11 after a major debt restructuring.
Wolfspeed, Inc. (NYSE:WOLF) makes advanced semiconductors using silicon carbide and gallium nitride materials, primarily for power applications.
8. Ondas Inc. (NASDAQ:ONDS)
Number of Hedge Fund Holders: 34
Ondas Inc. (NASDAQ:ONDS) is one of the AI Bubble Stocks to Short Now According to Reddit. The stock’s short float exceeds 31%; however, analysts’ 12-month average price target suggests more than 67% upside from the current levels.
Recently, on June 2, Ondas Inc. (NASDAQ:ONDS) announced that its subsidiary World View Enterprises has secured a $4.8 million, three-month contract with the US Naval Forces Southern Command and defense technology firm SMX. Management noted that the project includes deploying high-altitude balloon systems to support counter-narcotics operations and combat illegal fishing across the Eastern Pacific and Caribbean.
As per the contract, the subsidiary of Ondas will provide intelligence surveillance and reconnaissance from the stratosphere, allowing military operators wide-area visibility across vast and complex maritime environments. Moreover, this contract is based on the previous contracts under which World View showcased how stratospheric platforms can support real-time maritime surveillance and AI-enabled analytics.
That said, Ondas Inc. (NASDAQ:ONDS) delivered strong fiscal Q1 2026 earnings on May 14. During the quarter, the company’s revenue hit $50.1 million, reflecting more than a tenfold increase year-over-year and more than 25% ahead of the management’s high-end guidance. The company also raised its full-year 2026 revenue target to at least $390 million, representing approximately 670% growth over 2025.
Ondas Inc. (NASDAQ:ONDS) provides private wireless, drone, and automated data solutions in the United States and internationally.
7. IonQ, Inc. (NYSE:IONQ)
Number of Hedge Fund Holders: 39
IonQ, Inc. (NYSE:IONQ) is one of the AI Bubble Stocks to Short Now According to Reddit. The stock’s short float stands at around 20%; and the company posted its fiscal Q1 2026 earnings on May 6.
During the quarter, IonQ, Inc. (NYSE:IONQ) delivered its fourth consecutive quarter of record revenue, with revenue reaching $64.7 million, reflecting a 755% year-over-year increase and 30% above the midpoint of its own guidance. Following the release, management raised its full-year revenue outlook to $260 million to $270 million, implying continued organic growth of 100% or better.
Management highlighted the sale of IonQ’s first 256-qubit, sixth-generation chip-based quantum system. The company also received its first ion trap chip samples back from fabrication, marking a shift from component testing to full system-level integration. Notably, the remaining performance obligation surged 554% year over year to a record $470 million, providing strong visibility into future revenue.
IonQ Inc. (NYSE:IONQ) is a developer of quantum computing systems. It provides access to quantum computers via its own cloud services, as well as other cloud platforms such as Microsoft’s Azure Quantum and AWS.
6. Applied Digital Corporation (NASDAQ:APLD)
Number of Hedge Fund Holders: 39
Applied Digital Corporation (NASDAQ:APLD) is one of the AI Bubble Stocks to Short Now According to Reddit. On May 28, Applied Digital Corporation (NASDAQ:APLD) was reiterated with a Buy rating and a $66 price target by Needham analyst John Todaro.
The analyst cited strong multi-year growth visibility following conversations with the management. Todaro’s core thesis revolves around a 1.7 gigawatt development pipeline spread across three campuses, with strong power deliveries from late 2027 into 2028. He believes that this positions the company to capture AI and data center demand for an extended period.
The analyst also noted customer diversification as a key risk-reduction factor. He highlighted that by expanding beyond a single hyperscaler, the company is targeting investment-grade revenues of 70%. Based on this thesis, the analyst finds Applied Digital as an attractive stock at current valuations.
Although Applied Digital Corporation (NASDAQ:APLD) has a high short float ratio of roughly 29.9%, Wall Street’s 12-month average price target suggests more than 50% upside from the current level.
Applied Digital Corp (NASDAQ:APLD) builds and operates digital infrastructure for AI and computing companies in North America. The company provides data centers and GPU computing solutions for businesses working in AI.
While we acknowledge the potential of APLD to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than APLD and that has 100x upside potential, check out our report about the cheapest AI stock.
Click to continue reading and see the 5 AI Bubble Stocks to Short Now According to Reddit.
Disclosure: None. Follow Insider Monkey on Google News.
