Wall Street Is Betting Against These 3 Popular AI Stocks. Should You?

Core Viewpoint - Wall Street shows a divide on AI stocks, with heavy short interest indicating skepticism about companies meeting high expectations [1][2] Group 1: Market Sentiment - Several AI-related stocks, including SoundHound AI (SOUN), Applied Digital (APLD), and CleanSpark (CLSK), are heavily shorted, suggesting traders believe these companies may not fulfill market hype [2] - Bears highlight concerns over valuation, inconsistent earnings, and execution risks, while high short interest could present buying opportunities if fundamentals improve [2][3] Group 2: Company Overview - SoundHound AI (SOUN) - SoundHound AI specializes in voice and conversational AI, utilizing proprietary speech-recognition and natural language processing technology for various applications [4] - SOUN stock has experienced volatility, down approximately 36% over the past year but up about 7% year-to-date [4] - The stock is valued at around 28 times forward sales, indicating high growth expectations despite the company still burning cash [5] Group 3: Financial Performance - In Q3 2025, SoundHound reported revenue of $42 million, a 68% year-over-year increase, but the net loss widened to $109.3 million from $21.8 million a year prior [6] - On a non-GAAP basis, the loss was about $13 million, with adjusted EBITDA showing a loss of approximately $14.5 million [6] - The company maintains a strong balance sheet with $269 million in cash and no debt, and management highlighted strong contract wins and a tripling of the order backlog [6] Group 4: Strategic Developments - At CES 2026, SoundHound introduced "Amelia 7," a platform for in-vehicle commerce and multimodal AI, enhancing its offerings in voice commerce [7] - Strategic partnerships, such as the integration with OpenTable for in-car services, indicate a clear strategy for monetizing voice interactions [7]