Investors continue to gobble up shares in AI companies, eager to profit off the red-hot sector, but the sharks are circling. The activist short-selling firm Hindenburg Research, famous for its market-making takedowns of top companies such as Block and Adani Group, published two reports last week on companies it views as unduly benefiting from the AI boom: the server and storage manufacturer Super Micro, and the software company iLearningEngines. Both companies' share prices fell sharply in response.
The reports come amid escalating hype around AI companies, from hyperscaler giants such as Microsoft and Google to hardware firms and even utilities that could profit from the demand. Last week, the GPU manufacturer Nvidia announced better-than-expected earnings results but its stock price still dropped, reflecting growing caution about the frothy industry, especially among institutional investors.
