Three AI Stocks Ready for a Bounce
After a significant fall, these names are poised to move higher. Here's how I'm playing them.
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When the stock market peaked in late 2024, some of the most overbought tech names were in the AI sector.
Since then, markets have made a significant pullback. Those AI names are now no longer overbought.
Now that these volatile stocks are down, which names are ready to bounce back?
Upstart Holdings
In a volatile market for tech, San Mateo-based Upstart Holdings UPST has been steadily, stealthily gaining ground. Shares of this $4 billion AI lending platform have gained nearly 20% since the April 7 open.
Since the February 12 close, this stock has lost more than half its value, but recently started trending higher. Upstart is currently trading below its major moving averages, so there is considerable resistance ahead.
Because this stock is gaining momentum, I’m taking a long position now. I’ll exit if Upstart drops below its April 7 opening price of $31.80.
SoundHound AI
Since reaching an all-time high in December of last year, shares of SoundHound AI SOUN have lost about two-thirds of their value.
However, despite increased market volatility, SoundHound has formed a base in the $8 area, where it has trading since the start of this month.
The fact that this stock is basing while the overall market is fluctuating leads me to believe that the worst of the heavy selling is behind us.
Just one month ago, this stock traded at $10.50. In order for SoundHound AI to regain that level, it must first climb above its 50-day (blue) and 200-day (red) moving averages.
If SoundHound can climb back above those key indicators, I’ll use that as a signal to buy.
We made an earlier buy attempt with SoundHound AI back in January. At the time, SoundHound had pulled back to its 50-day moving average, so we based our trade around that indicator.
When SoundHound broke below its 50-day MA (blue), we took a small loss and moved on. One of the principles of sound risk management is to cut your losses.
C3AI
Similar to Upstart and SoundHound AI, C3AI AI has slowly been gaining ground after forming a base. Shares of this Redwood City, California-based enterprise AI company have climbed about 12% since the April 7 open.
We’re going long C3AI, but will sell the stock if it drops below the April 7 low of $17.
Keep in mind that these AI stocks are speculative. Solid risk management is important, especially when dealing with speculative stocks in a volatile market. Plan your exits in advance, and don’t hesitate to cut losing trades.
At the time of publication, Ponsi was long UPST and AI.
