October 22, 2025
Smart investors know that knowing when to sell is just as important as knowing what to buy.
While most financial media focuses on stocks to purchase, we look for companies facing serious problems that might make them worth selling. These aren’t just stocks that are temporarily underperforming – they’re businesses facing real challenges with their operations, finances, or that are simply overvalued.
We don’t make recommendations based on short-term price movements or news headlines. Each company on this list has been carefully analyzed using multiple factors that often predict significant price drops.
Good portfolio management means both buying and selling at the right time. Often, the best decision is to move your money away from troubled positions before problems show up in the stock price.
Nebius Group (NBIS)
Nebius Group confronts the AI bubble deflation that threatens all unprofitable infrastructure plays trading at extreme multiples on future promises. The stock plummeted 7.6% this week as mainstream financial media simultaneously questioned AI valuations, with Forbes asking if “the AI bubble may burst,” CNBC noting “fears of an AI bubble are growing,” and USA Today questioning whether it’s “time to hoard cash.” This coordinated skepticism targeted companies like Nebius that have quadrupled year-to-date despite lacking profitability.
The fundamental problem is that Nebius’s valuation has completely detached from near-term financial reality. With a $28 billion market value against expected annualized run rate revenue of approximately $1 billion, the company trades at a price-to-sales ratio of 28—ten times higher than typical software companies and unsustainable without explosive revenue growth. Despite the September announcement of a $17.4 billion multi-year partnership with Microsoft to provide dedicated GPU capacity, Nebius remains unprofitable with a negative 20.07% profit margin as it burns cash on R&D and aggressive data center expansion.
At $113.65, Nebius shows the speculative excess in AI infrastructure stocks where billion-dollar partnerships and impressive revenue growth rates (625% year-over-year in Q2) cannot overcome the reality of persistent losses and extreme valuation multiples. The company’s three-year revenue decline of 68.3% before its recent AI pivot highlights execution risks, while projected capital expenditure of $2 billion for 2025 creates substantial cash burn that will likely require additional dilutive financing. The market’s growing skepticism about AI bubble dynamics specifically targets companies with Nebius’s profile—unprofitable, extreme multiples, and dependent on continued AI spending euphoria to justify valuations. For investors, the convergence of bubble warnings and fundamental concerns suggests exiting before the broader market reassessment accelerates.
Bitfarms (BITF)
Bitfarms shows the dilution spiral that threatens Bitcoin miners pivoting to AI infrastructure as the company upsized its convertible notes offering from $300 million to $500 million within 24 hours, citing “strong demand.” The stock crashed over 18% following Wednesday’s initial announcement, as investors recognized that even with capped call transactions designed to limit dilution, the sheer magnitude of the offering relative to the company’s $3 billion market cap represents substantial equity impairment risk.
The convertible notes structure reveals the precariousness of Bitfarms’ financial position despite its 315% year-to-date stock surge. With an initial conversion price of approximately $6.86 per share—just 30% above the $5.28 closing price when announced—the conversion threshold sits dangerously close to current trading levels. While the company touts capped calls that reduce dilution up to a 125% premium ($11.88 per share), this protection expires if the stock continues its volatile trajectory. The negative 6.69% profit margin underscores that Bitfarms remains fundamentally unprofitable despite pivoting toward higher-margin AI/HPC infrastructure at its Panther Creek campus.
At $5.01, Bitfarms trades on speculative optimism about AI data center opportunities rather than demonstrated operating profitability. The company’s characterization of the massive capital raise as “opportunistic” for “general corporate purposes” provides minimal visibility into specific deployment plans or expected returns. With the notes maturing in 2031 and paying just 1.375% interest, Bitfarms has effectively locked in significant future obligations while operating in the notoriously volatile cryptocurrency mining and AI infrastructure markets. For investors who rode the spectacular 2025 rally, the combination of massive dilution risk, negative margins, and unclear capital deployment suggests exiting before conversion dynamics or operational reality erodes current valuations.
GE Vernova (GEV)
GE Vernova demonstrates how valuation reality checks can devastate even well-positioned companies when analyst skepticism pierces market euphoria. The industrial powerhouse plummeted over 4% this week following Rothschild Redburn’s downgrade from neutral to sell with a $475 price target—representing 23% downside from current levels near $600. Analyst Simon Toyne’s assessment that the stock reflects margin expectations that are “implausibly positive in the long term” crystallizes concerns that have been building around the company’s premium valuation.
The fundamental challenge facing GE Vernova is the disconnect between its current trading multiples and the historical reality of the gas turbine market. Trading at a trailing P/E ratio of 148.86 and a forward P/E near 50x—significantly higher than the electrical industry average of approximately 29x—the stock is “priced for perfection” despite operating in a notoriously cyclical business. Toyne specifically highlighted the gas turbine market’s historical variability, noting that demand shifts dramatically based on long-term infrastructure requirements that are subject to sudden change. This cyclicality directly contradicts the steady margin expansion investors have baked into current valuations.
At $599.56 with a $163 billion market value, GE Vernova’s 18.54% profit margin and minimal 0.08% dividend yield provide little cushion against operational disappointments or market reassessments. While GLJ Research and Mizuho maintained more optimistic stances with price targets of $758 and $677 respectively, the market’s decisive response to Rothschild’s bearish call suggests investors recognize the valuation vulnerability. The company’s price-to-book ratio of 18.95 approaches historical peaks, while its EV/EBITDA of 97.13 reflects expectations that require flawless execution across multiple business segments. For investors, the combination of extreme valuation multiples in a cyclical industry with limited margin of safety suggests taking profits before the market’s lofty expectations inevitably meet operational reality.