2 Beaten-Down Artificial Intelligence (AI) Stocks for Contrarian Investors to Consider Buying

The article is a bullish-but-cautious take on Recursion Pharmaceuticals and Fiverr, both of which have fallen sharply and are being framed as contrarian opportunities. Recursion has no approved products or late-stage assets yet, but its AI-driven drug discovery approach and REC-4881 data in familial adenomatous polyposis could validate the model if clinical progress continues. Fiverr is shifting toward larger, more complex projects, with EPS improving to $0.23 from $0.02 year over year even as revenue and active buyers decline.

Analysis

RXRX is still a platform bet, not a company-specific earnings story. The market is likely discounting a longer path to proof because AI can improve target selection yet still fail at the one thing investors ultimately pay for: reproducible human data showing higher probability of clinical success. That means the stock’s upside is convex but gated by binary readouts; the first credible late-stage or regulatory win would not just rerate RXRX, it would also force a broader repricing of AI-enabled biotech peers and potentially pressure incumbents to accelerate partnership activity.

The second-order winner may be large pharma, not RXRX. If AI materially lowers discovery cost, the firms with capital, clinical infrastructure, and commercialization scale capture the best economics by buying or licensing validated assets after de-risking, which is exactly where LLY has strategic optionality. In other words, the near-term monetization path for AI drug discovery may be partnerships and milestone economics, while the long-duration equity upside for standalone platform developers remains highly path-dependent.

FVRR’s strategic shift is more interesting as a margin mix story than a top-line acceleration story. Moving toward larger, more complex projects raises take rate durability and buyer retention if it works, but it also increases dependency on a smaller cohort of higher-value buyers, making the business more sensitive to churn and macro spend cuts. The key hidden risk is that AI can both create demand for specialized freelancers and simultaneously compress the addressable market by automating simpler tasks; the winner is whichever platform owns the scarce, hard-to-automate workflow.

Consensus may be underestimating how much operational discipline can matter in a shrinking revenue tape. If FVRR can keep profitability improving while revenue stabilizes, the equity can rerate on free-cash-flow credibility before growth returns. But if active buyers keep deteriorating for another 2-3 quarters, the market will stop paying for the strategy narrative and focus on terminal demand erosion instead.

Key Decisions for Investors

• RXRX: only initiate via small, defined-risk starter position ahead of clinical catalysts; prefer call spreads over common to capture convexity while limiting downside if data disappoints.
• RXRX / LLY pair: long RXRX as a high-beta validation trade against short or underweight LLY only if you want exposure to AI-drug discovery adoption; otherwise use the pair the other way around (long LLY / short RXRX) to express 'platforms monetize slower than incumbents' as the base case.
• FVRR: look for a tactical long only on evidence of buyer stabilization over 1-2 quarters; structure as a small equity position or Jan-2027 call spread to avoid paying for a turnaround that may take 12-18 months.
• FVRR vs software/marketplace peers: pair long FVRR against a short basket of lower-quality freelancer-exposure names if the thesis is 'complex-project mix improves margins while commoditized gig demand weakens.'
• Avoid chasing either name on headline momentum; the better entry is after the next operating update, where the market will either confirm the catalyst path or price in another leg of fundamental deterioration.