Buying a declining stock can sometimes lead to substantial gains later on. But if a stock drops for the right reasons, you might just be setting yourself up for a loss.
A few stocks over the past 12 months that I wouldn’t risk investing in right now are: C3.ai (NYSE: AI) and trading desk (NASDAQ:TTD).
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Here’s why these stocks are likely to fall further in value this year.
Shares of technology company C3.ai fell 61% last year. The artificial intelligence (AI) company’s performance fell short of expectations and it recently replaced its CEO, with Stephen Ehikian replacing longtime CEO and founder Thomas Siebel.
Despite the excitement around artificial intelligence, the company has struggled to generate positive growth of late. The company’s total revenue fell 20% to $145.4 million in the six-month period ended October 31, 2025. At the same time, from a profit perspective, its losses have become larger and larger, expanding from US$128.8 million in the past two quarters to US$221.4 million.
C3.ai has a lot to prove. Despite delivering more than 130 turnkey enterprise AI solutions, growth simply hasn’t happened. Until that changes, I’d avoid this stock – no matter how much it falls in value.
The Trade Desk performed even worse than C3.ai, with its stock price falling an astonishing 72% over the same period. The company operates in the highly competitive ad technology space, where clients may reduce ad spending amid growing economic uncertainty.
There has also been some management volatility recently. On January 26, the company announced that Tahnil Davis would take over as the company’s interim chief financial officer. As early as August last year, the company appointed Alex Kayyal as its new chief financial officer, replacing Laura Schenkein. Volatility and question marks caused the stock to sell off again.
Another problem is that the company’s growth rate has been declining (from 27% to 18% in the most recent quarter), which is especially problematic for a stock that’s valued high because of its growth. Despite the sharp decline over the past 12 months, the stock still trades at nearly 40 times trailing earnings, which is likely too expensive for most investors given all the uncertainty surrounding the business.
