Artificial Intelligence (AI) stocks have been the newest craze to hit Wall Street in a market of ever-growing disruptions. Recently, ChatGPT joined the hype with its AI-based trading platform that allows users to trade on company news and other intelligence sources — hoping to shake up the traditional investment climate by giving everyday traders access to trends usually exclusive for institutional investors. Despite some skepticism around the success of this new development, industry leaders are already laying their bets with larger investments in AI stocks as they consider their data worth more than gold.
On Monday, the stocks of C3.ai Inc., BigBear.ai, and SoundHound AI continued to surge as artificial intelligence has become a popular topic on Wall Street due to the enormous success of ChatGPT chatbot, gaining attention from small-time investors.
Shares of C3.ai (AI.N) experienced an increase of 11%, while BigBear.ai (BBAI.N) saw a jump of almost 21%, and SoundHound (SOUN.O) skyrocketed by 40%. The three software companies had noteworthy gains in the market today.
The three small-cap companies were discussed on stocktwits.com, a social media platform focused on investors. Their tickers were mentioned in the conversations.
Dennis Dick, a trader at Triple D Trading, says:
“Any company that mentions ChatGPT or something about AI, sees this rally … it’s just the hot buzzword of the month,”
Investors are looking to invest in companies that develop AI-related technologies following the successful launch of OpenAI’s ChatGPT, which resulted in a multi-billion dollar investment from Microsoft Corp (MSFT.O).
In a UBS study last week, it was estimated that ChatGPT had reached 100 million monthly active users in January – only two months after being released – making it the most rapidly growing consumer application of all time.
This year, C3.ai and SoundHound have seen their values more than double, while BigBear.ai has experienced an even greater surge of over 700%.
Matthew Unterman, the director at analytics platform S3 Partners in New York, remarked that the price rise was caused by extended purchases rather than any major short covering; investors had opted to invest in AI stocks.
Many investors are caught up in the latest market craze, buying AI stocks without knowing what they’re investing in. But as we’ve seen repeatedly, blindly following the herd is a recipe for disaster. If you’re considering buying into the AI stock bubble, do your homework first to know what you’re getting into.
Source: reuters.com
