The right stocks can make you rich and change your life.
The wrong stocks, though… They can do a whole lot more than just “underperform.” If only! They can eviscerate your wealth, bleeding out your hard-won profits.
They’re pure portfolio poison.
Surprisingly, not many investors want to talk about this. You certainly don’t hear about the danger in the mainstream media – until it’s too late.
That’s not to suggest they’re obscure companies – some of the “toxic stocks” I’m going to name for you are in fact regularly in the headlines for other reasons, often in glowing terms.
I’m going to run down the list and give you the chance to learn the names of three companies I think everyone should own instead.
But first, if you own any or all of these “toxic stocks,” sell them today…
Nike (NKE) Facing Mounting Headwinds
Nike (NKE) continues to face significant challenges, and now may be the time to step aside. The stock is already down 31% over the past year, and recent analyst downgrades suggest more downside could be ahead.
UBS warns that escalating U.S.-China trade tensions could lead to higher tariffs, potentially beyond the current 10%. This is a major problem for Nike, which relies on China for both manufacturing and a large portion of its sales. Any increase in tariffs could drive up costs while also pushing Chinese consumers toward domestic brands, further pressuring Nike’s market share.
Citi recently downgraded Nike to neutral from buy, slashing its price target from $102 to $72. Analyst Paul Lejuez walked away from a meeting with Nike’s new CEO with little confidence in a near-term turnaround. He cited continued sales pressure, margin headwinds, and a lack of compelling new products to replace declining key franchises.
Nike is also facing growing competition from smaller brands like Hoka, On, and Birkenstock, which are expanding into its core markets. Meanwhile, Nike’s need to offload old inventory at discounted prices could hurt demand for new full-price launches, making it harder to regain lost momentum.
With trade risks looming, sales growth uncertain, and margins under pressure, Nike looks like a stock to avoid for now.
ChargePoint (CHPT) – The Struggles Keep Piling Up
ChargePoint was once seen as a key player in the EV revolution, but its stock has collapsed from over $30 at its public debut to around $1 today. The company has struggled with slowing growth, mounting losses, and increasing competition from Tesla’s Supercharger network and EVgo’s fast-charging stations. Making matters worse, ChargePoint now expects revenue to decline between 17% and 19% in fiscal 2025, with analysts forecasting just $416 million in sales—well below previous expectations. A growth company losing revenue is a serious red flag.
ChargePoint remains deeply unprofitable, with a projected GAAP net loss of $270 million this year and negative adjusted EBITDA of $127 million. The company had previously set a goal of reaching EBITDA profitability by 2025, but that milestone has now been pushed back to at least 2027. At the same time, its transition from lower-margin Level 2 chargers to more competitive but lower-margin Level 3 DC chargers is squeezing profitability.
Another major concern is dilution. Since going public, ChargePoint has increased its share count by 59% to cover stock-based compensation and secondary offerings. More dilution is likely as the company continues to burn cash. With shrinking revenue, continued losses, and growing competition, ChargePoint is a stock to avoid.
SoundHound AI (SOUN) – Too Much Hype, Not Enough Substance
SoundHound AI has been riding the AI wave, with shares skyrocketing 165% since Election Day. While excitement around artificial intelligence has fueled investor interest, the company has yet to prove it can translate its partnerships into sustainable profitability.
Recent deals with Torchy’s Tacos and Church’s Texas Chicken have given the stock a boost, but these agreements alone don’t justify the stock’s lofty valuation. Over the past 12 months, SoundHound generated just $67 million in revenue while posting a staggering $111 million net loss. At a price-to-sales ratio of 65, it’s priced like a company with explosive earnings growth—yet it remains deeply unprofitable.
For the rally to continue, SoundHound AI needs to demonstrate a clear path to profitability. Right now, investors are paying a premium for speculation rather than proven results. With AI stocks facing increased scrutiny, this could be a good time to take profits before reality catches up.
