Considering current market volatility and the opportunity to capitalize on rebounding industries, needless to say it may not make sense to bet on stocks whose prices could retreat due to their fundamental weakness or industry headwinds. Both Snap (SNAP) and NIO (NIO) look overvalued at their current price levels considering their weak financials and growth prospects. So, we think these stocks are best avoided now.Because the Federal Reserve sees two interest rate hikes coming by late 2023, a year earlier than anticipated, the stock market is expected to remain volatile. Furthermore, the reopening of the economy is making the prospects of several pandemic-hit industries look bright, leaving investors with plenty of options in which to invest for quick and bigger returns.
With several stocks currently trading at sky-high valuations and with rising inflation being a major concern, the chances of fundamentally weak stocks suffering big losses in the near term are high.
Given this backdrop, we don’t think it makes sense to invest in Snap Inc . (NYSE:SNAP) and NIO Inc. (NIO). They are trading at lofty valuations with insufficient fundamental strength and growth prospects. So, we think these stocks could be among the major losers in the near term.