November 15, 2025
Every successful investor knows a painful truth: knowing when to sell is often more critical than knowing what to buy.
While financial media overwhelmingly focuses on buying opportunities, our research consistently identifies companies facing significant headwinds that merit serious consideration for selling. These aren’t just stocks underperforming the market; they’re businesses confronting structural challenges, deteriorating fundamentals, or carrying valuations disconnected from financial reality.
What you won’t find here: reactionary calls based on short-term price movements or headline volatility. Each company on this list has been thoroughly analyzed across multiple metrics that historically precede substantial declines.
Smart investors understand that portfolio management requires both addition and subtraction. Sometimes the best investment decision is to redeploy capital away from troubling positions before problems fully materialize in the share price.
This week’s watchlist highlights stocks showing critical weaknesses that demand immediate attention:
Iren Limited (IREN)
Iren Limited exemplifies how accounting gimmicks and aggressive deal structures can temporarily mask underlying cash flow problems, with the AI infrastructure company plummeting 22% this week and now trading more than 35% below its recent all-time high of $76 per share as investors finally scrutinize what lies beneath the impressive headline numbers. The former Bitcoin mining operation successfully pivoted to AI infrastructure and reported seemingly spectacular fiscal first-quarter results including 455% year-over-year revenue growth and a record $385 million profit, numbers that superficially suggest a company capitalizing brilliantly on surging AI demand. However, astute investors this week recognized that the reported profit included substantial unrealized gains related to convertible notes issued by the company, representing paper profits from financial engineering rather than cash generated from operations, fundamentally undermining the narrative of a profitable, cash-generative business model.
The company’s capital structure reveals deeper concerns about its ability to fund ambitious expansion plans through operating cash flows alone, with Iren counting on prepayments from its recently announced multiyear, nearly $10 billion cloud computing contract with Microsoft to meet some cash needs rather than relying on internally generated funds. While the Microsoft deal provides validation and revenue visibility, the company’s dependence on customer prepayments to finance data center construction scheduled for early next year and 2027 suggests the business cannot self-fund its growth despite the extraordinary revenue surge and reported profitability. This financing structure creates execution risk where delays in receiving prepayments or cost overruns on data center construction could strain liquidity, while the convertible notes that generated the reported profits represent future dilution that will weigh on per-share value when holders eventually convert.
Trading at around $46 per share with a market capitalization of approximately $13 billion, Iren carries a valuation that assumes seamless execution of its data center buildout, sustained demand for AI infrastructure at current pricing levels, and conversion of revenue growth into genuine cash profitability rather than accounting profits inflated by unrealized gains. The 31.17% gross margin suggests reasonable unit economics when fully operational, but the reliance on creative financing and accounting treatments to manufacture the appearance of profitability raises fundamental questions about whether the business model can generate sufficient returns to justify current valuations once all the financial engineering is stripped away. The broader market’s growing skepticism about whether announced AI infrastructure investments will actually materialize adds additional risk, as Iren’s growth trajectory depends entirely on sustained enterprise spending on AI capabilities that may moderate if economic conditions deteriorate or if the current AI investment cycle proves less durable than enthusiasts project. For investors who captured gains during the six-month run from $5 to $76, this week’s collapse presents a clear signal that the market has stopped giving Iren the benefit of the doubt on its transition story, making this an opportune moment to exit before subsequent quarters reveal the true cash-generating capacity of the business model.
WhiteFiber (WYFI)
WhiteFiber demonstrates how recently public companies trading at aggressive valuations can experience brutal corrections when quarterly results fail to meet the elevated expectations embedded in IPO-era pricing, with shares plummeting as much as 18% intraday following third-quarter results that exposed meaningful shortfalls despite seemingly strong headline growth. The data center company reported a loss of $0.47 per share, coming in $0.31 worse than analyst expectations, while revenue of $20.2 million fell approximately $1.8 million short of estimates despite representing impressive 65% year-over-year growth. The market’s savage reaction to what might otherwise appear as solid growth numbers reflects recognition that cloud services revenue growth of 48% annually fell meaningfully below expectations, suggesting the company’s core AI-focused services are failing to capture market share at the rate investors anticipated when subscribing to the August IPO.
The stock’s performance since going public in August illustrates the dangers of buying into hyped IPOs near their debut prices, with shares now up just 6% from the offering price despite the broader AI infrastructure sector experiencing substantial appreciation during the same period. This underperformance relative to sector peers suggests company-specific execution challenges rather than industry-wide headwinds, with the cloud services growth disappointment indicating that WhiteFiber may lack competitive advantages necessary to win business in an increasingly crowded market where hyperscalers and established providers dominate customer relationships. The 28.43% gross margin provides limited cushion for a business still posting significant losses while attempting to build out capacity, raising questions about how long the company can sustain investments in new data center sites without achieving the scale necessary to reach profitability.
Trading at around $18 per share with a market capitalization of approximately $681 million, WhiteFiber carries a valuation of roughly 7.9 times expected current-year sales despite persistent losses and slowing growth in its core cloud services segment. While management continues evaluating additional data center sites to support future expansion, this aggressive growth strategy requires either sustained access to capital markets or achievement of profitability to fund organic growth, neither of which appears imminent given the widening losses and revenue shortfalls. The stock’s 52-week range of $14.01 to $40.75 demonstrates the extreme volatility inherent in recently public, unprofitable growth companies where sentiment can shift dramatically based on quarterly results, with current pricing approaching the bottom of this range and threatening to break lower if the fourth quarter fails to show acceleration in cloud services growth. For investors seeking AI infrastructure exposure, WhiteFiber represents the worst aspects of speculative IPOs: a company burning cash to chase growth in a competitive market, missing expectations despite favorable industry tailwinds, and trading at premium valuations that assume eventual market leadership the business has yet to demonstrate it can achieve.
Canaan (CAN)
Canaan confronts the perfect storm facing companies positioned at the intersection of three increasingly troubled narratives—cryptocurrency mining, AI infrastructure, and data centers—with the stock plummeting 10% as Bitcoin dropped below the psychologically important $100,000 level for the first time in nearly four months while broader skepticism about AI investment sustainability compounds sector-wide pressure. The cryptocurrency mining equipment manufacturer and miner operates in all three areas currently falling out of investor favor, creating a situation where multiple negative catalysts simultaneously weigh on sentiment with no offsetting positive drivers to cushion the decline. Bitcoin’s retreat below $100,000 reflects growing economic concerns including the aftermath of the federal government shutdown, which has reduced expectations for near-term Federal Reserve rate cuts that typically boost appetite for riskier assets like cryptocurrencies.
The company’s catastrophic gross margin of negative 520.96% reveals a business model in complete disarray, where Canaan is losing more than five dollars on cost of goods sold for every dollar of revenue generated, representing a fundamental breakdown in unit economics that extends far beyond normal scaling challenges or temporary operational inefficiencies. This extreme negative margin suggests the company faces structural problems with its cost base, product pricing, or both, creating an unsustainable situation where every incremental dollar of revenue actually accelerates losses rather than contributing toward eventual profitability. The convergence of three troubled sectors—with cryptocurrencies facing reduced expectations for supportive monetary policy, AI infrastructure investments drawing increased scrutiny over sustainability, and data center buildouts confronting questions about eventual returns—leaves Canaan with no clear path to recovery even if one of these sectors stabilizes.
Trading at $0.90 per share at the time of writing with a market capitalization of approximately $400 million, Canaan represents a penny stock masquerading as an AI/crypto play, with the company’s 52-week range of $0.53 to $3.27 illustrating the extreme volatility and downward trajectory that has defined 2025 despite the broader AI and cryptocurrency sectors experiencing substantial growth. The negative gross margin makes discussion of traditional valuation metrics meaningless, as the company is structurally unprofitable at the most basic level of its operations, losing money on every unit sold before even considering operating expenses, interest costs, or other corporate obligations. The recent decline in Bitcoin below $100,000 creates additional pressure on an already struggling business, as lower cryptocurrency prices typically reduce demand for mining equipment while simultaneously making mining operations less profitable for Canaan’s own mining activities. For investors still holding positions, Canaan exemplifies a classic value trap where an apparently cheap stock price masks a fundamentally broken business model exposed across three simultaneously deteriorating end markets, making immediate exit imperative before the company’s operational losses and lack of viable path to profitability become impossible to ignore.
