AI Stocks to Avoid: Meta Materials, SolarEdge Technologies, MaxLinear, AXT, SunPower, Tower Semiconductor, Aurora Mobile – All Score ‘F’ in Portfolio Grader
Investing in artificial intelligence (AI) stocks can be lucrative, but not every stock in the AI sector is a winner. It is crucial to identify the stocks to avoid before making any investment decisions. Here are some AI stocks that have received a poor rating and should be avoided, according to the Portfolio Grader.
Meta Materials (NASDAQ:MMAT) is a semiconductor company that specializes in developing and producing functional materials and nanocomposites, particularly in lithium battery materials. However, despite the hot semiconductor market, Meta Materials has struggled this year, with its stock price dropping by 92%. In the third quarter, the company reported a net loss of $8.7 million, with revenue declining to $2.2 million. Given its poor performance and low stock price, Meta Materials receives an F rating in the Portfolio Grader.
SolarEdge Technologies (NASDAQ:SEDG) is another AI stock to avoid. The company manufactures power optimizers and inverters used in solar panels. However, SolarEdge disappointed investors with lower-than-expected earnings in the third quarter. Its stock price has declined by more than 70% this year, leading to many analysts downgrading the stock. SolarEdge receives an F rating in the Portfolio Grader.
MaxLinear (NASDAQ:MXL) develops semiconductors for the communications industry. However, the company faced setbacks this year, including backing out of a planned acquisition and experiencing weakened Q3 earnings. Its stock price has dropped nearly 50% this year, and it receives an F rating in the Portfolio Grader.
AXT (NASDAQ:AXTI) manufactures compound semiconductor wafer substrates used in photonics and wireless devices. However, AXT has been struggling with weak sales, with revenue declining to $17.4 million in the third quarter. The company posted a loss of $6.7 million for the quarter. AXT’s stock price is down 52% this year, and it receives an F rating in the Portfolio Grader.
SunPower (NASDAQ:SPWR), a solar power company, has seen its stock price drop by 75% this year. SunPower recently announced it will need to restate its financial statements and reported lower revenue and operating loss in the third quarter. As a result, SunPower receives an F rating in the Portfolio Grader.
Tower Semiconductor (NASDAQ:TSEM), an Israeli semiconductor company, had a deal in place to be acquired by Intel, but the deal fell through due to regulatory issues. The company has also faced declining revenue and profits. Tower Semiconductor receives an F rating in the Portfolio Grader.
Aurora Mobile (NASDAQ:JG), a Chinese marketing technology company, provides mobile data products and solutions. However, its revenue remains down, and the market has shown disinterest in Aurora’s product. The stock price has dropped by 86% this year, and Aurora receives an F rating in the Portfolio Grader.
In conclusion, while AI stocks generally represent innovative and disruptive companies with significant growth potential, not all AI stocks are winners. Investors should be cautious and avoid stocks with poor ratings such as Meta Materials, SolarEdge Technologies, MaxLinear, AXT, SunPower, Tower Semiconductor, and Aurora Mobile.