OfInvesco QQQ Trust ETF(NASDAQ:QQQ), a fund that largely consists oftech stocks, is up 45% in the past year. And for some specific names in semiconductors and AI, profits have been parabolic.Supermicrocomputer(NASDAQ:SMCI) is up over 1,000% in the last twelve months, to name one example.
While the profits have been extraordinary, there is no guarantee that the good times will continue. First, the Federal Reserve may be backing away from its plans to cut rates given the recent run of hot inflation data. And second, while AI is a technology with extraordinary promise, it is far less certain how the proliferation of AI tools will impact business outcomes.
Particularly in the tech stock space, there are some companies that have seen shares ride the AI wave, but may not see their businesses significantly improve in the coming months and years. With valuations at high levels, now is the time to sell these tech stocks before the inevitable correction arrives.
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Autodesk (ADSK)
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Autodesk(NASDAQ:ADSC) is in an interesting place when it comes to artificial intelligence. The graphics software company could benefit if AI enables faster workflows and expands the addressable market for its services.
On the other hand, artificial intelligence could lead many of Autodesk's current customers to abandon Autodesk solutions altogether and outsource everything to AI.
This risk came to a head last week when another graphics software company,Adobe(NASDAQ:ADBE) saw shares fall 14% after weak earnings results. Adobe collapsed the following FebruaryThe debutfrom OpenAI's Sora text-to-video generator. And Adobe's disappointing earnings report added to concerns that artificial intelligence could be a Trojan horse for the graphics software world.
As for Autodesk, its shares are up 30% in the past year, partly on hopes that AI will improve the bottom line. But like Adobe, it runs the risk that nimble competitors will be able to use tailor-made AI tools to capture parts of Autodesk's core design and digital prototyping market. With Autodesk selling for32 timesestimated revenues in fiscal year 2025, there isn't much room for error here if something goes wrong for Autodesk from a business execution perspective.
Marvell Technologies (MRVL)
Bron: Michael We / Shutterstock.com
Marvell Technologies(NASDAQ:MURLY) is a semiconductor company involved in several chip companies. It focuses, among other things, on System-on-a-Chip architectures, Ethernet solutions, electro-optical products and custom application-specific integrated circuits.
While Marvell is broadly diversified across chip types, its A.Iproduct offerhas received the most attention in recent months. Marvell makes it a point to share his collaboration withNvidia(NASDAQ:NVDA) and the focus on providing AI infrastructure for the AI era.
Shares of MRVL stock rose last year on hopes that Marvell's AI positioning would lead to robust earnings growth. Unfortunately, it wasn't to be.
Marvell's latest Q4 results were ahuge disappointment. The company grew revenue by just 1% year over year. To make matters worse, Marvell reported a net loss for the quarter. And the weakness is expected to continue into fiscal 2025; the company offered Q1accompanimentwell below Wall Street estimates and noted that gross margin could decline sequentially. Despite all the hype surrounding the growth of AI, this hasn't translated into meaningful bottom line results for companies like Marvell.
Airship AI Holdings (AISP)
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Airship AI Holdings(NASDAQ:AISP) provides a video, sensor and data management surveillance software platform with an emphasis on law enforcement and crime prevention solutions. By focusing on artificial intelligence, traders have shown interest in AISP stock; the shares increased fivefold in the month of March.
To give more context to that, Airship AI was announced via a SPAC withBYTE acquisition. Shares fell from the initial offering price of $10 to less than $2 as the company didn't seem to show much momentum initially.
Even based on the company's SPACpresentation for investorsRevenue only seemed to grow about 10-15% per year, and the company was expected to generate just $14.5 million in revenue by 2022.
Shares areshootingon some new ones latelyproject announcements. But without much tangible revenue or profit, it's difficult to predict how much these contracts actually add to the bottom line.
Anyway, Airship AI has been around since 2006 and is still generating quite limited revenue after 18 years. I'm highly skeptical that the current AI wave will suddenly turn the fortunes of this struggling software company. With shares up nearly fivefold overnight, traders should head for the exits.
As of the date of publication, Ian Bezek had (neither directly nor indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to change by InvestorPlace.comPublishing Guidelines.
Ian Bezek has written more than 1,000 articles for InvestorPlace.com and Seeking Alpha. He also worked as a junior analyst for Kerrisdale Capital, a $300 million New York City-based hedge fund. You can reach him on Twitter at @irbezek.
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