These three AI stocks to sell have had less-than-ideal performances this year and lack a solid foundation despite their promise to turn things around. If you are holding these stocks, it may be better to sell them before they take any more losses that hurt your pockets.

Let’s learn about the top AI stocks to sell.

BigBear.ai (BBAI)

BigBear.ai (NYSE:BBAI) is an AI company focusing on security and supply chain AI. The company also recently completed an acquisition of Pangiam Intermediate Holdings, solidifying its hold in Vision AI for use in National Security. While BigBear performed marvelously in 2021, it has fallen ever since and failed to return to its former glory.

One of the most alarming signs surrounding BigBear is the lack of growth. For example, the company’s most recent earnings report declared $33.1 million in revenue. Year over year, this represents a 21.4% decrease compared to the first quarter of 2023. The company’s gross margin has also decreased year over year.

While the company maintains its revenue guidance of $195 million to $215 million, its net loss has grown exponentially in the first quarter of 2024. While net loss hovered between $22 – $30 million in 2023, the company reported an astonishing $125.1 million net loss in the first quarter. 

BigBear promises exciting revenue growth this year, but its bottom line and profit margin still raise concerns for its future. Therefore, BigBear is not a viable investment, and investors should think about selling now to put their money elsewhere to take full advantage of the AI boom. 

C3.AI (AI)

Despite massive expectations initially, C3.AI (NYSE:AI) has fallen and has yet to show investors the growth they seek. A price jump that lasted for a few months in 2023 showed some promise. However, the stock price has fallen significantly this year, and growth has stagnated.

While revenue growth for C3.AI ‘s most recent quarter was up significantly from a year ago, compared to the previous quarter, revenue was only up 7%. C3.AI specializes in AI for Enterprises and has partnered with huge companies like Amazon Web Services, Google Cloud and Microsoft. With a roster of this magnitude, you would expect huge success.

The company also significantly increased completed agreements and new pilots in the most recent earnings reports. While all of this promise sounds enticing, it is hard to see it as more than speculation, given the company’s slow revenue growth and continued net loss quarter to quarter. 

This AI stock is not currently sustainable, with a free cash flow of negative $45.1 million and a net loss of $0.13 per share. While C3.AI has the potential to grow in the future, if you are holding shares right now, this could be a great time to let them go and find more promising stocks.

Upstart (UPST)

Upstart (NASDAQ:UPST) is a fintech company with a state-of-the-art AI lending platform. It has been around for a long time and has established a diverse customer base of banking organizations. Banks can screen borrowers and give out loans more efficiently and thoroughly through Upstart’s landing platform.

In times when interest rates are low and many more people are open to taking out loans, Upstart sees a huge boost in business. However, the reverse is also true. Upstart took a major hit when the Federal Reserve increased interest rates to the elevated heights they are at now. The company reported a net loss of $64.6 million in the most recent quarter.

While Upstart has managed to cut this loss in half compared to the first quarter of last year, it is still significant. Outlook for the next quarter also includes a slight dip in revenue and a small increase in net loss, showing little hope for a recovery soon. 

While Upstart has potential, its volatility and wavering financial performance make it an extremely high-risk stock. It may be better to let go of this AI stock before high interest rates continue to sink its value.

On the date of publication, Joel Lim did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.