As the AI wave continues to reshape the global economic landscape, the emergence of leading companies in this field is commonplace. However, while some are thriving, others are inevitably disappointed – those companies that failed to adopt the technology in time may face the risk of being eliminated by the times, and industry insiders previously seemed not to have been very vigilant about this risk.
In response, Wedbush Securities, a well-known firm in the industry... Analyst Dan Ives has turned his attention to this area. In a report released Monday, he listed 12 "AI loser" stocks, believing these companies will struggle in the field of artificial intelligence. Those most likely to be "left behind" in a market surge are those with a neutral or underperforming rating. This list includes a range of stocks rated neutral or underperforming by the company, including:
Intel HP Qualcomm Uber Lyft, Pinterest, Trade Desk, Adobe, DocuSign, Workday, Nice, and Maplebear (Instacart).
Among them, Wedbush analysts have recently abandoned their bullish stance on Pinterest and Nice stocks.
Hardware manufacturers face cost pressures
Let's examine them one by one. Although Intel , HP , and Qualcomm are hardware manufacturers, Ives believes they are still among the "losers" because the AI infrastructure boom is impacting their core businesses through what he calls a "memory squeeze." As demand exceeds supply, driving up memory costs, these hardware suppliers will find it difficult to pass on these costs to consumers who buy PCs.
The Wedbush team points out that even with US government support, Intel has seen little success—the company has failed to secure any substantial deals and continues to lose market share in the AI infrastructure market, being eroded by AMD. Given that approximately 60% of Intel's revenue comes from PCs rather than AI servers, Ives predicts that the company's gross margin may shrink by more than 5% by the end of 2026.
Software stocks impacted by AI
Software stocks such as Adobe, DocuSign, Workday, and Nice may be severely impacted by market concerns that AI will render traditional software solutions obsolete, and Ives believes these companies will struggle to rebound. He points out that these companies rely on a high-cost subscription model that charges per user, while AI tends to favor a low-cost "consumption" model that charges based on usage.
Ives pointed out that, excluding the impact of exchange rates, Adobe's annual recurring revenue from its digital media business (including services such as Illustrator and Photoshop) has seen a "slight slowdown." He added that Adobe's in-house research and development in the field of generative artificial intelligence is "struggling to significantly improve monetization capabilities."
Ives also mentioned that Adobe has lagged behind its competitors in the rollout of its AI product, Firefly. This means the company will ultimately find itself in a situation where it "maintains market share rather than gains it." He further predicted that as cheaper AI creative tools become more widespread, Adobe's core professional user base will gradually shrink.
Ives recently downgraded Nice, a cloud contact center-as-a-service (CCaaS) platform provider, reflecting the threat of a shrinking user base. The Wedbush team points out that Google's parent company Alphabet and Amazon... and Microsoft Large-scale enterprises are entering the market sectors where Nice operates.
Are advertising, food delivery, and ride-hailing companies also facing problems?
Wedbush's team stated that large tech giants are also impacting smaller advertising businesses like Pinterest and Trade Desk, as well as food delivery and ride-hailing companies such as Instacart, Uber , and Lyft.
Advertisers are increasingly prioritizing the ecosystems of Amazon , Google, and Meta because these platforms can collect data directly from customers, prompting Wedbush analyst Scott McDevitt to take a more cautious stance on Pinterest's prospects in a report on Monday.
Meanwhile, Ives wrote in the report that with Tesla The rise of driverless taxis like Cybercab and Waymo by Google is causing a “huge disruption” for ride-hailing companies – the industry’s value is shifting from asset-light platforms to platforms with a complete autonomous driving technology stack.
(Article source: CLS)
