Though Wall Street's major stock indexes have all entered correction territory in 2025, the iconic Dow Jones Industrial Average and benchmark S&P 500 remain firmly in a bull market. Throughout history, bull markets have, on average, lasted substantially longer than bear markets.
But just because the market's major indexes head higher over extended periods, it doesn't mean every high-flying or influential stock is worth buying.
What follows are three seemingly unstoppable stocks I wouldn't hesitate sending to the chopping block right now.
Image source: Getty Images.
Palantir Technologies
Let me preface this discussion by clearly stating that "stocks I'd sell right now" doesn't mean I necessarily think a company is a bad or that its stock is worth short-selling. In some instances, it simply means a solid company has reached a valuation where even the best operating results imaginable can't support its valuation. This is the case with artificial intelligence (AI)-driven data-mining specialist Palantir Technologies (PLTR 1.07%).
Palantir has a lot working in its favor. First and foremost, its government-focused Gotham software-as-a-service platform has no one-for-one replacement. Companies that offer sustained moats are rare on Wall Street and tend to be rewarded with hefty valuation premiums.
Additionally, Palantir's operating cash flow is highly predictable -- and Wall Street loves transparency. Gotham typically lands multiyear deals with the U.S. government and its allies, while its enterprise-focused Foundry segment is a subscription-driven model.
However, shifting to recurring profits ahead of Wall Street's consensus, possessing a sustainable moat, and growing sales by roughly 30% annually, still doesn't support Palantir's exorbitant valuation.
NASDAQ: PLTR
Key Data Points
Throughout history, some of Wall Street's most influential businesses on the leading edge of a next-big-thing innovation peaked at price-to-sales (P/S) ratios of roughly 30 to 43. Microsoft, Amazon, Cisco Systems, and even AI juggernaut Nvidia all saw their P/S ratios top out in this range.
Palantir entered the previous week at a P/S ratio of more than 100, and ended May 9 with a P/S ratio of nearly 94. At no point throughout history has a megacap company been able to sustain a P/S ratio of 30, let alone a value three times this amount for any extended period.
To make matters worse, there's a historically high correlation of next-big-thing innovations enduring early stage bubble-bursting events. In other words, for more than three decades, investors have consistently overestimated the early adoption rate and real-world utility of a game-changing technology or innovation. Considering that most businesses haven't come close to optimizing their AI solutions, artificial intelligence appears to be the next in a long line of early innings bubbles.
Thanks to Palantir's predictable operating cash flow, vis-à-vis its multiyear contracts and subscriptions, it wouldn't experience a sudden revenue drop-off if the AI bubble bursts. Nevertheless, its otherworldly valuation premium would put a target square on the proverbial back of Palantir stock.
Image source: Tesla.
Tesla
A second seemingly unstoppable stock I wouldn't hesitate to kick to the curb right now is North America's leading electric-vehicle (EV) manufacturer Tesla (TSLA 0.81%). Unlike Palantir, which I view as a rock-solid company with a wholly unattractive valuation, I struggle to find redeeming qualities with Tesla.
Its best attribute has been its five consecutive years of generally accepted accounting principles (GAAP) profit. Elon Musk's company has leaned on its first-mover advantages in the EV space to ramp up its production capacity for its Model 3 sedan and Model Y SUV (the company's best-selling model globally).
It's also attempting to spread its wings beyond the cyclically driven auto industry. Tesla's energy generation and storage operations are pacing more than $10 billion in annual sales.
The issues I have with Tesla can be boiled down to four core factors.
To begin with, the company's first-mover EV advantages are fading. Two years ago, Elon Musk made clear during Tesla's shareholder meeting that EV pricing is based on demand. Therefore, Tesla enacting more than a half-dozen price cuts on its fleet (Models 3, S, X, and Y) is indicative that demand is waning and/or competitive pressures are building. The end result has been a rapid decline in the company's vehicle margin.
Secondly, Tesla's earnings quality is poor. Though it's being priced as an aggressive growth stock, a majority of its pre-tax income traces back to automotive regulatory credits and interest income earned on its cash. These are unsustainable and non-innovative income sources.
NASDAQ: TSLA
Key Data Points
The third concern is that CEO Musk often fails to deliver on game-changing projects. Musk has commented that Level 5 full self-driving is "one year away" for the last 11 years, and his promise of robotaxis on public roadways "next year" failed to come to fruition five years ago. If all of Musk's unfulfilled promises were backed out of Tesla's valuation, shares could reasonably fall more than 80%.
Lastly, Tesla's valuation is an eyesore. It's (predominantly) an auto stock that's valued at an estimated 156 times forecast earnings per share (EPS) for this year. Tesla's 2025 GAAP earnings are on track to decline by 56% from 2023, and aren't expected to reach 2023's EPS level again until 2028. This is no longer a growth stock.
Strategy
The third seemingly unstoppable stock I'd ring the register on and sell right now is self-proclaimed "Bitcoin (BTC 0.81%) Treasury Company," Strategy (MSTR 3.21%), which recently rebranded from "MicroStrategy." Whereas Palantir is a good company with an unattractive valuation, and Tesla is at least profitable on a GAAP basis over the last five years, there's not a single redeeming quality, in my view, to owning Strategy stock.
For decades, Strategy was a middling enterprise analytics software provider. Over the last decade, its software sales have slid by nearly 13%. Even adding buzzy keywords like "artificial intelligence" to its software division hasn't helped profitability or its cash flow.
CEO Michael Saylor completely pivoted his company's strategy (ergo, the name change) to acquiring the world's largest cryptocurrency by market cap, Bitcoin. As of May 5, Strategy held 555,450 Bitcoins, which it's spent more than $38 billion to acquire. This equates to approximately 2.65% of all Bitcoin that will ever exist (including future mining).
NASDAQ: MSTR
Key Data Points
But I believe there are number of glaring flaws with Strategy's Bitcoin-driven growth thesis.
For starters, Strategy is levering its Bitcoin buying with seemingly never-ending at-the-market (ATM) offerings and preferred stock sales. The company's ATMs are dilutive and artificially propping up the price of Bitcoin in the short-term, while the company's preferred stock will produce interest payments the company simply can't make. Strategy will be issuing even more of its shares to satisfy the high yields of its preferred stock.
To build on this point, Strategy's software segment isn't generating positive operating cash flow, which means issuing shares is the company's only alternative to raise capital. Investors have witnessed leverage similar to this before, and it (historically) doesn't end well for shareholders. Strategy requires that Bitcoin only move up, and history shows a number of steep bear markets for the world's largest digital currency.
Another reason to jettison Strategy is the company's completely unjustifiable premium to its net asset value (NAV). As of this writing in the late evening on May 9, a single Bitcoin will set an investor back $103,073. This means the NAV of Strategy's Bitcoin portfolio is about $57.25 billion.
However, its market cap at the closing bell on May 9 was $113.74 billion. Applying a very generous $1 billion valuation to the company's shrinking software business means investors are paying a 97% premium to NAV to own shares of Strategy. In short, they're paying about $204,200 per Bitcoin when they could just buy it on an exchange for $103,073. This premium isn't sustainable.
Finally, Bitcoin itself has its flaws. Despite having first-mover advantages, Bitcoin's network isn't anywhere near the fastest, and it's a far cry from the cheapest, in terms of validating and settling transactions. Bitcoin is a first-generation blockchain network that's been surpassed in efficiency by a number of third-generation networks.
