On August 25, Steve Levy, Wired editor-at-large, joined ‘Squawk Box’ on CNBC to discuss the state of AI valuations and whether we’re in an AI bubble or not. Levy described the current situation as an upward spiral that no one can stop, driven by the significant costs of running these businesses, which include computation, data, and talent, and the widespread belief that AI is the sector that will propel the entire tech world and beyond to new heights. Levy suggested that there will eventually be a reckoning because not all of these companies will be able to justify their valuations with future revenues. However, for now, the ride just keeps going on. Levy also agreed to the statement that a potential pop or correction in this AI-related bubble would be more painful for private market investors than for public market investors. He explained that while larger public companies are making significant capital expenditures on AI, they are still fully developed businesses. In contrast, the valuations of private companies are driven strictly by the desire of investors to get into the AI space and the hope that the company they back will be the next OpenAI. He concluded that private companies are much more vulnerable.
In reference to a McKinsey report that showed little to no return on investment/ROI for companies currently using AI, Levy explained that this is where the reckoning will come. He stated that it will take time for the genuine advances in AI to translate into actual revenue. He notes that while consumers are currently using AI features on platforms provided by the MAG7, they are not paying extra for it. The hope, he says, is that eventually, consumers will have an AI bill, similar to an electricity bill, and feel they are getting great value, which would justify the high valuations. He compares the current situation to the paradox of productivity from the early PC era, where it took years for the value of computers to become financially apparent. He predicts that it will take years, maybe even a better part of a decade, for AI to generate revenue from consumers.
That being said, we’re here with a list of the 11 worst AI stocks to invest in according to financial media.
Methodology
To compile our list, we sifted through rankings of AI stocks on different financial media websites to compile a list of AI stocks. We then selected the 11 stocks that were the least popular among elite hedge funds and that analysts were bearish on. The stocks are ranked in descending order of the number of hedge funds that have stakes in them, as of Q2 2025.
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. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
11 Worst AI Stocks to Invest in According to Financial Media
11. SoFi Technologies Inc. (NASDAQ:SOFI)
Number of Hedge Fund Holders: 47
SoFi Technologies Inc. (NASDAQ:SOFI) is one of the worst AI stocks to invest in according to financial media. On September 4, SoFi announced a multi-year partnership with Buffalo Bills quarterback and 2024 AP NFL Most Valuable Player, Josh Allen. The collaboration aims to promote SoFi’s premium membership, SoFi Plus, by highlighting its features that help members achieve their financial goals.
The partnership will be featured in a marketing campaign starting at the beginning of the NFL season. The campaign will air on major streaming platforms and national cable networks, including NBC, ESPN, Amazon Prime Video, and YouTube. The goal is to show how SoFi’s services can empower users to “be the MVPs of their own finances.”
SoFi Plus is described as “America’s most rewarding financial membership” and offers over $1,000 in value. Its benefits include a high Annual Percentage Yield/APY of up to 3.80% on SoFi Bank savings and a 1% match on recurring deposits into SoFi Invest accounts. The campaign with Josh Allen, who is known for his hard work and determination, is meant to resonate with members who are also pursuing ambitious goals.
SoFi Technologies Inc. (NASDAQ:SOFI) provides various financial services in the US, Latin America, Canada, and Hong Kong. It has 3 segments: Lending, Technology Platform, and Financial Services.
10. Nebius Group (NASDAQ:NBIS)
Number of Hedge Fund Holders: 45
Nebius Group (NASDAQ:NBIS) is one of the worst AI stocks to invest in according to financial media. On September 8, Nebius Group announced a multi-year, multi-billion-dollar agreement with Microsoft Corp. (NASDAQ:MSFT). The deal is valued at $17.4 billion over five years, with an option for Microsoft to acquire additional services that could bring the total contract value to ~$19.4 billion.
Under the agreement, Nebius will provide Microsoft with dedicated AI infrastructure capacity from its new data center in Vineland, New Jersey, with deliveries starting later in 2025. Nebius plans to finance the capital expenditures for this contract using a combination of cash flow from the deal itself and issuing debt secured by the contract. The company also stated that this is its first long-term contract with a major tech company and that more are expected in the future.
Nebius views this deal as a catalyst for its business. It is expected to accelerate the growth of Nebius’s AI cloud business in 2026 and beyond. The company also has other business ventures, including Avride (autonomous driving technology) and TripleTen (an edtech company), and holds equity stakes in businesses like ClickHouse and Toloka.
Nebius Group (NASDAQ:NBIS) is a technology company that builds full-stack infrastructure to service the global AI industry in the Netherlands, Europe, North America, and Israel.
