• The hottest AI stocks from earlier in 2023 have fallen in recent weeks.

• Insider looked at 10 of the top AI stocks and found that many are in correction territory.

• Saying 'AI' during an earnings conference call has lost its allure among some investors.

You can only say "AI" so many times on an earnings conference calls before investors start to tune out.

In recent days, some of the hottest AI stocks of 2023 have entered correction territory. That's when shares fall 10% from a recent peak.

Insider took a look at 10 of the hottest AI stocks from earlier this year and analyzed how they've performed since peaking. The declines ranged from a loss of 2.3% to a slump of 29%, based on the close of trading Aug. 9. Five of the 10 have lost more than 10%.

This could be a short-term blip, or a reaction to higher long-term interest rates, which can depress high-growth tech stocks. Or, it could be a sign that investors are getting weary of the AI hype, and concerned that this technology could take years to generate real profits, if ever.

In an insightful research note from early June, Morgan Stanley analysts described Amara's Law, which states that we tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run.

They noted that the first week of June saw the largest inflow into public tech equities in history. At $9 billion, that was at least 40% more than the next largest weekly inflow.

"If Generative AI is to avoid becoming an Amara Law hype cycle, these tools will need to demonstrate stickiness over the medium-term, a feat that is becoming more challenging over time," the researchers wrote.

In the spring, an executive only had to mention the word "AI" on an earnings conference call and traders would mash the buy button. I suspect automated trading systems were also calibrated to buy on such signals.

Big tech companies mentioned AI 168 times during first-quarter analyst calls. AI stocks were flying then. In May, Insider highlighted 10 of the biggest gainers YTD in 2023, including C3.ai, Nvidia and AMD.

Trading trends like this can only go on so long. And they often peter out when everyone has finally bought in and there are no more new buyers. (And, yes, using automation and AI to buy AI stocks is probably a self-fulfilling prophecy that also can't last).

We're now in second-quarter earnings season, and mentioning AI doesn't seem to have the same effect anymore. Executives have dropped the term 390 times already this season compared to 92 a year ago, according to a Bloomberg report from July 28. The tech-heavy Nasdaq is down more than 3% since then.