Three Artificial Intelligence (AI) Stocks to Consider Selling in February 2024
The AI industry has been experiencing significant growth, with stocks associated with AI seeing substantial increases in value. However, some analysts are starting to warn of a potential bubble forming in AI stocks. As such, investors are advised to approach the market with caution. In this article, we highlight three AI stocks that investors may want to consider selling in February 2024.
1. Arm Holdings (NASDAQ: ARM)
Investors who have a stake in Arm Holdings may want to take profits now before the share price experiences an inevitable pullback. ARM stock recently soared by 60% following better-than-expected earnings results. The chip designer reported earnings per share (EPS) of 29 cents, surpassing Wall Street’s estimate of 25 cents, and generated revenue of $824 million, beating the forecast of $761 million. With Arm’s chips being widely used in smartphones and computers, the company’s growing demand in the AI sector has propelled its stock to new heights. However, considering the sudden surge in price, it may be wise to lock in profits.
2. Intel (NASDAQ: INTC)
Intel, another chip stock heavily involved in AI, is facing some challenges that make it a potential sell candidate in February. Despite delivering strong fourth-quarter 2023 earnings, Intel’s financial outlook fell short of expectations. The company’s weak guidance projected Q1 earnings of 13 cents on $13.20 billion in revenue, compared to analysts’ anticipated earnings of 33 cents on $14.15 billion in sales. Furthermore, Intel’s announcement of a delay in the construction of a new manufacturing plant due to weak market demand and financing difficulties has dampened investor sentiment. With INTC stock down 10% this year and experiencing a five-year decline of 16%, it may be time to cut losses.
3. Super Micro Computer (NASDAQ: SMCI)
Super Micro Computer, a provider of high-performance servers for AI, cloud computing, and 5G wireless networks, has witnessed a remarkable surge in its stock price. SMCI stock has soared by 160% in just six weeks, with a staggering 718% gain in the last 12 months. The company’s partnership with AI microchip leader Nvidia added fuel to its stock rally. However, some investors now consider Super Micro Computer a meme stock, and there are concerns that its rapid ascent may not be sustainable. While the company has reported strong preliminary financial results and provided positive forward guidance, investors should be cautious about buying at the top.
In conclusion, the AI industry has experienced significant growth, leading to substantial gains in AI stocks. However, some AI stocks may be entering bubble territory, warranting caution from investors. Arm Holdings, Intel, and Super Micro Computer are three AI stocks that investors may want to consider selling in February 2024. It is essential to carefully evaluate market conditions, company performance, and future prospects before making any investment decisions.
Disclaimer: This article is not financial advice. Investors should conduct their own research and consult with a financial advisor before making any investment decisions.
References:
1. VanEck Semiconductor ETF performance: [insert hyperlink]
2. Arm Holdings earnings surprise: [insert hyperlink]
3. Intel’s weak financial outlook: [insert hyperlink]
4. Intel’s delayed construction of a manufacturing plant: [insert hyperlink]
5. Super Micro Computer’s stock rally: [insert hyperlink]
6. Super Micro Computer’s partnership with Nvidia: [insert hyperlink]
