Though the NASDAQ has been performing well this year due to favourable economic shifts, some stocks have not kept up with the trend.
Some stocks have started to see a slowdown in the momentum from last year and are set on a path that only leads downwards.
- The NASDAQ has had a stellar performance, with the economy seeming optimistic, but not all stocks share the benefits.
- Tesla has had a tremendous growth record but an equally tremendous slowdown, and it is set to fall from great heights.
- Costco’s growth is limited but still holds a high valuation, setting it up for a steep drop this year.
With May approaching fast, many investors are looking to clear out their portfolio of stocks doomed to tank this coming quarter. Financial Analyst at Trading.Biz Joel Lim has picked out two NASDAQ stocks that investors should sell soon to avoid big losses this upcoming month.
If you own any shares of Tesla or Costco, it may be time to let go, as this year only promises slow growth and potentially considerable drops in price that could cost you dearly.
Tesla (TSLA)
While Tesla has had a historic performance with unprecedented growth in previous years, starting from 2023, the EV giant has seen a steep drop in momentum. In the Q1 report for this year, Tesla reported a 9% drop in revenue and missed estimates for adjusted EPS and net income.
Like many other EV makers, Tesla is trying to regain sales momentum by offering a cheaper model to be released next year. While this may excite some, there is still the remainder of a likely even slower 2024 to clear first.
Tesla is not alone in its slow growth; the EV market is tapering downwards, with lower demand due to macroeconomic conditions and lower consumer spending. Joel Lim notes, however, “Other EV makers are in the same boat as Tesla, but none come close to the steep reduction in price because no company was priced higher at the beginning of the EV drought.”
Competition is heating up within the EV market, and many other companies are adopting a similar low-cost strategy. The coming year does not bode well for Tesla, and given its already high starting price, investors risk losing more as the stock falls further.
Costco (COST)
Costco has been an appealing stock for many and has seen huge jumps in price this year, reaching an all-time high in February. While this has appealed to many, there is room for doubt when considering how much more capacity Costco has to grow.
Costco’s current value is amongst the higher end of the price-to-earnings range within the NASDAQ, yet the stock has had less-than-promising quarterly results. The company reported an earnings miss for revenue in February, and year-over-year growth for the rest of 2024 is seemingly limited.
Joel Lim mentions, “Costco is overvalued considering the cap on its potential growth, and it is hard to see a short-term path for the stock that goes any direction but down.” Investors should be wary of holding this stock for too long as the return they once hoped for may not be as promising as anticipated.
Leave a Comment