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A recent SPAC merger left CXApp (NASDAQ: CXAI) stock trading near $2, but a combination of short interest and AI hype triggered a 1273% run up in April. CXAI’s run might not be over yet, after Microsoft Corporation’s (NASDAQ: MSFT) impressive Q3 earnings helped renew investors’ enthusiasm for AI stocks.
While MSFT’s earnings beat is partially attributed to its investments and integration of AI, the term has become the latest buzzword for CEOs and politicians alike and CXAI stock could be one of the artificial intelligence stocks to benefit from this momentum.
CXAI Stock News
CXAI’s 1273% run up dates back to the beginning of April when Artificial intelligence stocks dropped after President Biden spoke against the dangers of artificial intelligence in society, saying “We have to address the potential risks to our society, to our economy, to our national security”. The President’s warning tapered investors’ enthusiasm for AI stocks resulting in high short interest on AI stocks like CXAI stock and Guardforce AI CO, Limited (NASDAQ: GFAI).
But not so long after Biden’s remarks, Elon Musk took a very different tone. Speaking in a Twitter Space interview on April 11th, he said Twitter and Tesla were buying GPU chips to train AI. This announcement coincides with his newly registered AI company – X.AI Corp – which is expected to compete with OpenAI’s ChatGPT.
As a result, some speculate that his new venture will use data from Twitter to train its language model and possibly even integrate with Tesla’s data. Twitter is also reportedly using these GPU’s for a generative-AI project. While the details of these projects have not been confirmed, Musk’s remarks renewed interest in artificial intelligence stocks – triggering a run-up across the artificial intelligence sector.
AI for Hybrid Workplaces
CXAI was one of the artificial intelligence stocks to benefit from these events since the company sells its AI-powered enterprise software – CXApp – to companies with a hybrid work environment.
This app is the company’s only product and is especially well-timed given the transition to hybrid workplaces. Ever since the Covid-19 pandemic, demand for access to hybrid work increased, and 74% of US companies are currently using or planning to implement a hybrid work model. Right now, CXAI’s key market segments consist of enterprise employees, and mid-market employees working in financial services, pharma and health, software, and entertainment.
With this transition in mind, CXAI’s product helps employees navigate the hybrid workplace environment using the app’s various features such as workspace reservations, personalized targeted communications, and in-app notifications. Since emails are no longer as efficient in the hybrid workplace, these features can help employees communicate more efficiently. Similarly, its always-on-access functions allow employees to easily access their work whether they are on-site or off-site at any time.
The app is a relatively recent product since CXAI released it on February 9th, 2023 under the name “WX SuperApp”. Despite this, the app has over 75 partners, including Adobe, Pepsi, Lenovo, and Warner Bros. The app already has a global, digital footprint as well since CXAI has deployed it on at least one campus and in approximately 240 cities and 55 countries worldwide.
CXAI’s product could have significant market potential since a recent report assessing the emerging market for mobile apps used in workplaces forecast that the market will grow from $406 million in 2020 to $988 million by 2025. If CXAI’s AI solutions are successfully implemented, the CXAI stock forecast could continue to improve as the company secures a greater share of this market.
CXAI Stock Short Squeeze
Since CXAI recently merged with KINS Technology Group in a SPAC deal on March 15th, the company has been adherent to its quiet period. For 40 days following its merger, CXAI has not been allowed to release news or updates. However, the company’s Chairman and CEO – Khurram Sheikh – is scheduled to deliver a cloud keynote at TiEcon 2023 on May 4th. Since this event is held after the quiet period and could be the start of regular communication from the company.
Currently, CXAI has 28.6% short interest which is not surprising given its tremendous run in April. This and the company’s recent SPAC merger as well as its quiet period have led to high short interest. With 41.7% of its float is on loan and the cost to borrow at 572.9%, CXAI could be a short squeeze play.
Now that the company’s quiet period has ended, CXAI could release news which may trigger a squeeze. Considering the momentum investors’ are bringing to artificial intelligence stocks, CXAI stock may be one to watch closely given its extremely low float of 1.87 million shares.
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On the hourly timeframe, CXAI stock is trading above 200, 50, and 21 MAs. RSI is approaching overbought at 68 and the MACD recently had a bullish crossover. Given that momentum has built over the weekend for artificial intelligence stocks, CXAI could see the second leg of its run now that the RSI has regulated.
Fundamentally, CXAI has no catalysts besides its quiet period ending. Its run up was fueled by high short interest and the momentum other artificial intelligence stocks have been seeing. Therefore, bullish investors could add or take a position on pullbacks.
Given its small float of 1.87 million shares, CXAI is very volatile. While the stock may continue to move with AI momentum, patient investors could wait for the stock to cool off and buy shares at its $6.23 support or lower. As catalysts roll out, the stock could replicate its impressive run in April.
CXAI Stock Forecast
CXAI stock could be one of the promising artificial intelligence stocks to watch considering the demand for AI and the transition towards hybrid offices all across the world. Now that the quiet period has ended, the company will likely provide investors with updates regarding its plans for the future. This plus its high short interest could make CXAI a short squeeze candidate.
While the popularity AI is seeing in the media could bring special attention to stocks like CXAI, considering its extremely low float, investors could wait for the stock to cool off before taking a position and hold for the next run up on news.
Long-term, CXAI will have to prove its product’s utility which depends on the growing adoption of hybrid workplaces and AI integration in the corporate setting. If Microsoft’s earnings are any indication, AI will continue to play an important role in people’s work and personal lives which aligns with CXAI’s vision for its product. However, investors will need to wait for the company’s financial results to see whether its vision also aligns with the marketplace.
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