AI, artificial intelligence
Contrary to a lot of popular belief about stocks benefitting from artificial intelligence hype, the price charts of these AI stocks show problems. Some of the most mentioned AI-related companies are now in significant downtrends from their early 2025 peaks or their late 2024 all-time highs.
A number of these have dropped below their 200-day moving averages, a technical analysis measure of relative longer-term strength. It’s better for investors when stocks trade above that rather than below it, generally. Those who own such equities with a “forever and ever” timeframe may ignore this.
4 AI-Related Stocks In Downtrends
Arista Networks daily price chart, 3 8 25.
The stock has slipped below both its 50-day moving average (the blue line) and its 200-day moving average (the red line). I’ve red-circled that area. Note that the 50-day has now turned downward and that the 200-day appears about to lose its upward momentum.
The computer hardware firm has a market capitalization of $105 billion. Its price-earnings ratio of 37 is about the same as that of the S&P 500. Arista’s debt-to-equity ratio is .01 with no long-term debt on the books. UBS on March 5th upgraded its opinion of the stock from “neutral” to “buy” with a price target of $115.
Nvidia daily price chart, 3 8 25.
The price peak came in mid-November 2024 at $152.50 with a failed re-test of that level in early January 2025. Since then, the stock has dropped below both the 50-day and the 200-day moving averages. This week’s action took the price to below the early February closing low near $115.
The most actively traded of all of the AI-related companies, this semiconductor designer has a market cap of $2749 billion. The price-earnings ratio of 39 is roughly inline with that of the S&P 500 as a whole. The debt-to-equity ratio is .13. Nvidia pays a .04% dividend.
ServiceNow daily price chart, 3 8 25.
The $1200 price peak of January 2025 is clear on this chart as is the subsequent slide to the present $850. That’s a 29% loss in value for those who purchased at the top. The stock now trades below both the 50-day and the 200-day moving averages. The 50-day is turning downward.
This software application firm has a market cap of $175 billion. The price-earnings ratio is 124. This year’s earnings are up 17.66% and up over the past five years 16.56%. Cantor Fitzgerald initiated coverage of ServiceNow in January 2025 with an “overweight” rating and a price target of $1332.
C3.ai daily price chart, 3 8 25.
From the early December 2024 peak of near $45 to the this week’s low of $21 amounts to a 53% drop from the top to the present. The price now trades below both the 50-day and the 200-day moving averages. The 50-day has turned to the downside. The early September 2024 low of near $19 may be a support level.
The software application company has a market cap of $2.91 billion. It’s a member of the Russell 2000 small caps ETF. The short float of 18.89% indicates strong interest among those hedge funds and money managers who specialize in the art. Should a rally develop, short covering could fuel it.
Stats courtesy of FinViz.com. Charts courtesy of Stockcharts.com.
More analysis and commentary at johnnavin.substack.com.
