As we approach the end of 2023, it’s clear that the year has been a strong one for investors. The S&P 500 has seen a 20% increase and has reached its highest point of the year as of Dec. 8.
Looking ahead to 2024, the potential for continued stock market success is evident if investors experience the soft economic landing they are anticipating. However, not all stocks will be winners in the coming year, just as there were plenty of losers in 2023 despite the broader market rebound.
Three stocks that investors should be cautious of in 2024 are Beyond Meat (BYND -0.11%), ChargePoint (CHPT 4.44%), and C3.ai (AI 8.65%).
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1. Beyond Meat: A Recipe for Losses
Following its IPO in 2019, Beyond Meat initially experienced significant success. However, the company has faced challenges in recent years, with declining revenue and negative gross profit. Despite attempts to cut costs and prioritize gross margin expansion, the fundamental issue lies in the lack of consumer demand for its product. Without a drastic turnaround, the stock is unlikely to see improvement in 2024.
2. ChargePoint: Stuck Between Tesla and a Hard Place
ChargePoint entered the market with high expectations as an electric vehicle charging specialist. However, it has struggled with the shift towards Tesla’s North American Charging Standard (NACS), putting it at a clear competitive disadvantage. With declining revenue and negative gross margin, the company is facing significant challenges and is in need of a turnaround strategy.
3. C3.ai: This AI Bubble Isn’t Sustainable
Despite enjoying gains in 2023, C3.ai faces potential challenges in the coming year. The company’s revenue growth is not as substantial as expected, and it is experiencing a wider adjusted operating loss, indicating a potential lack of sustainability. With a price-to-sales ratio above 10, C3.ai’s share price may experience a decline in 2024.
