Many on Wall Street have been asking themselves whether the market has become too optimistic and whether there is a bubble waiting to burst. The S&P 500 hit a record closing high earlier this month, and despite losses last week, the Wall Street index is still up more than 9% this year. The Nasdaq is also up more than 9% year to date. But gains have been concentrated among the “Big Seven” companies, led by Nvidia, which has soared since last year on the back of the artificial intelligence craze. More AI-related stocks also surged, such as Advanced Micro Computer Corp. Paul Meeks, co-chief investment officer of Harvest Portfolio Management and veteran technology investor, said artificial intelligence infrastructure that can build large language models “has advantages,” citing Nvidia and Advanced Micro Devices as examples. But on the other hand, he told CNBC Pro that some small AI investments are “dangerous.” He compared the moment to the dot-com era when the dot-com bubble burst, saying: “You have some success stories, right. Amazon was created, Alphabet was created, Meta was created. But most Those companies that had Internet products, a lot of them went bankrupt. I’m seeing the same thing here. There will be some big winners, but many companies claiming to have the AI story will go bankrupt. Meeks is so bearish on these stocks that he has shorted some AI-related stocks and is even looking for more. The short-seller aims to sell the borrowed shares and sell them later at a lower price price to buy back at a profit. He added: “Investors mistakenly pushed up the stocks of artificial intelligence counterfeiters, who mostly use artificial intelligence to create applications that are not yet proven and may never be that profitable. Pictureable. Meeks listed three companies that are good candidates to short right now: music tracking app SoundHound, BigBear.ai and C3.ai. SoundHound is up about 300% so far this year, while BigBear.ai is up 10% and C3.ai. ai is down 1.5% over the same period, although it is up 31% from a year ago. He shorted the first two trades and said he profited from those trades. “I have successfully shorted BBAI and SOUN, and their stock prices have followed are rising on other things that have nothing to do with AI, but they are crappy companies. The disappointing quarterly guidance ADBE announced last night is further evidence of “Where’s the revenue growth going in AI?” “I’m looking for more stocks to short based on my contrarian AI investing thesis,” he said.
