The CXApp (NASDAQ: CXAI) stock price has been in a strong bullish trend in the past two days as demand for companies in the artificial intelligence companies jumped. The CXIA share price soared to a high of $21, giving it a market cap of over $200 million.
CXIA chart by TradingView
What is CXApp?
AI has been one of the biggest themes this year following the success of ChatGPT. In the aftermath, companies like Microsoft, Alibaba, Baidu, Nvidia, and Alphabet have all announced new AI products as they chase an industry with a total addressable market of trillions.
Investors have pumped their money in AI companies and cryptocurrencies like C3.ai, Guardforce AI, SingularityNET, and Fetch.ai among others.
The most recent company to attract attention in the industry is CXApp, which went public last week through a SPAC merger. The stock jumped as investors predicted that the company will become a leading player in the AI sector.
For starters, CXApp, whose ticker symbol is CXAI, is a company that provides employee management solutions. It helps employees navigate the hybrid workspace well and in a simple manner. As a result, it is taking advantage of both AI and hybrid work, which are two main themes. Its features are office mapping, indoor navigation, and room booking among others.
Why CXAI stock price will crash
Still, there are reasons why I expect CXApp stock price will decline shapely in the next few days. First, this price action has a close similarity to what happened in AMTD. As you recall, AMTD stock price surged after going public last year, which made it bigger than Goldman Sachs. The stock has now crashed and is hovering near the lowest level on record.
Second, CXApp went public through a SPAC merger. Most of the companies that went public by merging with SPACs have all dropped. For example, we recently wrote about the collapse of Richard Branson’s Virgin Orbit. And last week, we wrote about ContextLogic, the parent company of Wish.com.
Third, the CXAI share price will crash as the initial momentum wanes. This happens all the time. A good example is what happened during the meme coin investing frenzy in 2021. Most companies that did well during the time like Blackberry, GameStop, and Bed Bath & Beyond have all plunged.
Finally, as I wrote in this article, investing in hot themes tends to be highly unprofitable. Ask investors who invested in metaverse tokens and solar and wind companies. Also, very little is known about CVApp considering that it has not published any information with the SEC.
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