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Why 'Loser' AI Stocks Like Ouster Inc. May Be the Secret Weapon in Your Portfolio

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  Published in Stocks and Investing on Tuesday, November 25th 2025 at 9:02 GMT by 24/7 Wall St

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Why “Loser” AI Stocks—Like Ouster Inc—May Be the Secret Weapon in Your Portfolio
— A Deep‑Dive Summary of the 247WallSt Feature (Published 25 Nov 2025)

The world of artificial‑intelligence (AI) stocks has exploded in the last few years, with the likes of Nvidia, Palantir, and even mainstream tech giants riding the wave of hype. Yet, in a surprising twist, 247WallSt’s latest article argues that the very companies that seem to be sliding toward oblivion—so‑called “loser” AI stocks—might actually represent a hidden value for investors willing to stay the course. By dissecting the case of Ouster Inc. and the broader AI ecosystem, the article makes a compelling, if contrarian, case that sometimes, the stock that looks most likely to flop is also the one that can deliver the best risk‑adjusted return.

1. The AI Stock Landscape in 2025

The article opens with a quick primer on the AI boom. In 2023‑24, a wave of unicorns and IPOs surged, driven by breakthroughs in generative AI, machine learning infrastructure, and autonomous systems. Companies like Nvidia capitalized on GPU demand, while smaller firms such as Ouster Inc.—a lidar‑sensor maker that went public in 2021—were valued at dizzying heights during that period.

Despite the hype, the article stresses that the AI space is highly volatile and capital‑intensive. Many firms have burned through cash on R&D and marketing without hitting a sustainable revenue stream. The result? A sharp correction across the sector in late 2024, as valuations tightened and investors demanded clearer business models.

Link 1 – The article cites a Wall Street Journal piece on “AI Valuations at Risk” (2025‑05‑01) that shows a 42% drop in average P/E ratios for AI stocks between Q2 2024 and Q1 2025. That context sets the stage for why “losers” might be worth a second look.

2. What Makes a “Loser” Stock Worth Holding?

The author argues that a “loser” is defined not by its current price alone, but by its potential to rebound once the market's fears subside. The key reasons to hold onto such a stock include:

The article uses the phrase “good to own a loser” in a tongue‑in‑cheek way, but the data behind it is robust. A reference to a Bloomberg study (2025‑08‑12) is cited, showing that average long‑term returns for AI stocks that fell >70% in 2024 were +18% annually over the following five years.

3. The Ouster Inc. Case Study

3.1 Business Overview

Ouster Inc. has built high‑precision, high‑resolution lidar sensors that power autonomous vehicles, robotics, and mapping systems. Their flagship product— the OS1‑128—offers a 128‑channel array, capturing 128 scan lines per second. The company claims a 10‑fold improvement in resolution over legacy 32‑channel systems.

Ouster’s business model is a B2B platform: OEMs purchase the hardware and integrate it into their vehicle systems. The company’s revenue mix is split roughly 60% lidar sensor sales, 20% data‑processing services, and 20% subscription licenses for their cloud analytics.

3.2 Financial Pain Points

According to the article, Ouster's Q3 2025 earnings report revealed:

• Revenue of $48 million—down 15% YoY.
• Operating loss of $23 million—worsened from $16 million loss in Q3 2024.
• Cash burn of $10 million per quarter, fueled by expanding R&D for 256‑channel lidar.

The company’s cash runway is cited at 8 months if it continues on current burn, according to its Form 10‑K filed on 2025‑09‑02 (link to SEC filing).

Link 2 – The article provides a direct link to Ouster’s 10‑K, which lists its debt obligations: $45 million in unsecured notes due 2027, and $12 million in convertible preferred stock.

3.3 Why Investors Should Still Care

• Strategic Partnerships: Ouster recently inked a $200 million deal with a major automotive OEM (reference to a TechCrunch article, 2025‑10‑01) to supply lidar for the next‑generation electric sedan.
• Patent Portfolio: Ouster holds over 150 patents in lidar technology, giving it a competitive moat against cheaper rivals like Velodyne and Luminar.
• Market Gap: The article points out that the global lidar market is projected to grow to $3.6 B by 2030, yet most supply is from China—an area where Ouster's U.S. manufacturing offers a strategic advantage.

4. The Bigger Picture: Contrarian AI Investing

The author extrapolates from Ouster to a broader category of “underwater” AI firms. Examples include:

• DeepMind (Alphabet) – Despite a strong brand, the unit's cost-to-innovation ratio is high, and Alphabet has cut funding to certain AI research labs.
• DataRobot – A SaaS platform that struggled to maintain market share against AWS and Azure Machine Learning.
• OpenAI’s commercial arm – While the research side is top‑tier, the profitability of the GPT‑3/4 subscription model is still uncertain.

The article quotes S&P Global analysts who say that “the AI space is still in a growth‑phase consolidation”. By the end of 2025, the author predicts that approximately 40% of AI firms that fell 60–80% in 2024 will regain at least 30% of their pre‑crash market cap over the next 12–18 months.

5. Risks and Practical Considerations

1. Liquidity Concerns – “Loser” AI stocks often trade with thin volume. The article recommends checking the average daily volume before buying. Ouster’s trading volume in Q4 2025 was 1.3 M shares versus an average of 4.8 M pre‑crash.

2. Valuation Dips – A price decline may be permanent if fundamentals don’t improve. The author advises fundamental analysis over price‑chart speculation. The article links to a Financial Times deep‑dive on Ouster’s cost‑of‑goods breakdown (2025‑08‑15).

3. Strategic Missteps – A company may be “lost” not just for market reasons but due to management missteps or regulatory issues. Ouster’s recent lawsuit over IP infringement (filed 2025‑06‑22) could affect its growth trajectory.

4. Portfolio Allocation – Even a solid contrarian thesis should be weighted modestly. The author suggests a 5–10% allocation of a core tech portfolio to “loser” AI holdings.

6. Take‑Away Message

While the headline—“Having loser AI stocks like Ouster Inc. in your portfolio is good”—might sound counter‑intuitive, the 247WallSt article makes a nuanced argument: In the high‑risk, high‑reward environment of AI, a carefully selected “loser” can be a bargain when you’re willing to wait out the turbulence.

The piece is not a blanket endorsement for all AI losers; it calls for discipline, fundamental due diligence, and a long‑term horizon. By highlighting Ouster’s technical strengths and strategic partnerships, it paints a picture of a company that has just hit a temporary low rather than an irreversible decline.

For investors who enjoy contrarian investing and are comfortable with extended timelines, the article offers a framework:
1. Identify AI firms with solid IP and strategic partnerships but currently cash‑burning or under‑performing.
2. Validate fundamentals with the latest SEC filings and industry analyses.
3. Allocate a small, defined portion of your portfolio.
4. Monitor liquidity and news catalysts—a sudden partnership or funding round can tilt the scales.

In the unpredictable world of AI, it turns out that sometimes the most promising play is the one that the market has dismissed. The 247WallSt feature reminds us that a well‑managed risk‑return calculus can turn a “loser” into a hidden asset—provided you have the patience to let the stock recover its true value.