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Over the past year, stocks with interest in the artificial intelligence (AI) space have seen significant returns as investors continue to bet on the technology.  For instance, chipmaker Nvidia (NASDAQ: NVDA) and American software giant Palantir (NASDAQ: PLTR)  are key leaders in this sector, helping investors register massive profits. Although the outlook on AI is widely positive, not all equities in the space are poised for success, as several headwinds hamper them.  To this end, Finbold has identified the following two AI stocks that investors should avoid for now. C3.ai (NYSE: AI) Enterprise AI software firm C3.ai (NYSE: AI) has faced notable challenges in sustaining growth despite its early promise of leading the sector.  Generally, the Redwood City-based firm is navigating an environment of slowed growth and profitability issues. At the same time, C3.ai is struggling with high operational costs amid slowed adoption of its AI products.  While it has secured some notable partnerships with entities such as Microsoft (NASDAQ: MSFT), its financial performance remains inconsistent as it attempts to catch up with competitors such as Palantir. Unlike Palantir, C3.ai remains unprofitable. For its fiscal 2025, the company targets an adjusted operating loss of $105 million to $135 million.  Another concerning aspect regarding AI stock is the notable insider selling. For instance, CEO Thomas Siebel sold shares worth $21.47 million on February 11 and 12. Typically, insiders selling may signal a lack of confidence in the company in the short term. From Wall Street, in early December 2024, Bank of America analyst Bradley Sills reaffirmed a ‘Sell’ rating on the stock, citing concerns over its business performance. This outlook emerged after C3.ai reported Q2 revenue growth of 29% year-over-year, with most of the growth coming from Prioritized Engineering Services rather than core subscriptions, which increased just 22%. This signals a…

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Filed under: News - @ February 15, 2025 1:24 pm