10 Most Popular AI Stocks to Avoid Now

5. C3.ai Inc. (NYSE:AI)

Year to Date Loss as of May 13: -30.52%

S&P 500 Year to Date Performance as of May 13: 4.92%

C3.ai Inc. (NYSE:AI) is an enterprise artificial intelligence (AI) software company that provides the C3 AI platform, an application development and runtime environment that enables customers to design, develop, and deploy enterprise AI applications. It has also made a name by offering software for classified work in the US military and large corporations. Nevertheless, the stock is down by 30.52% year to date, underperforming the overall sector, which is why it is one of the most popular AI stocks to avoid.

DA Davidson has already reaffirmed a Neutral stance on the stock with an $18 price target. The Neutral stance stems from growing concerns over an increase in C3.ai Inc.’s (NYSE:AI) nonrecurring revenue, prevailing macroeconomic uncertainty, and increased cuts in government expenditure. Given that a good chunk of the company’s clientele includes government entities, it raises serious concerns about future revenues and earnings on heightened cuts in spending.

DA Davidson also raised concerns about the future of C3.ai Inc.’s (NYSE:AI) relationship with Baker Hughes (NASDAQ:BKR), the company’s biggest client. The nature of the relationship is unclear, which could affect C3.ai’s sources of income and the company’s stability.