November 19, 2025
When it comes to investing, knowing when to sell is just as important as knowing what to buy. While most financial coverage focuses on buying opportunities, our research team has identified several companies facing significant challenges that investors should consider selling.
These stocks aren’t simply underperforming the market temporarily – they’re facing fundamental business problems, weakening financials, or carrying valuations that don’t match their current reality.
Our analysis isn’t based on short-term price movements or headline reactions. Each company has been thoroughly evaluated using multiple indicators that historically precede major stock declines.
Here are three stocks showing critical warning signs that demand your immediate attention:
Canaan (CAN)
Canaan faces the perfect storm at the intersection of three increasingly troubled narratives—cryptocurrency mining, AI infrastructure, and data centers—with the stock plummeting 10% as Bitcoin dropped below the psychologically important $100,000 level for the first time in nearly four months while broader skepticism about AI investment sustainability compounds sector-wide pressure.
The cryptocurrency mining equipment manufacturer and miner operates in all three areas currently falling out of investor favor, creating a situation where multiple negative catalysts simultaneously weigh on sentiment with no offsetting positive drivers.
Bitcoin’s retreat below $100,000 reflects growing economic concerns:
- Aftermath of federal government shutdown
- Reduced expectations for near-term Federal Reserve rate cuts
- Typically boost appetite for riskier assets like cryptocurrencies
The company’s catastrophic gross margin of negative 520.96% reveals a business model in complete disarray:
- Losing more than five dollars on cost of goods sold for every dollar of revenue generated
- Fundamental breakdown in unit economics
- Extends far beyond normal scaling challenges or temporary operational inefficiencies
- Every incremental dollar of revenue actually accelerates losses rather than contributing toward profitability
The convergence of three troubled sectors leaves Canaan with no clear path to recovery:
- Cryptocurrencies facing reduced expectations for supportive monetary policy
- AI infrastructure investments drawing increased scrutiny over sustainability
- Data center buildouts confronting questions about eventual returns
Trading at $0.90 per share with a market cap of approximately $400 million, Canaan represents a penny stock masquerading as an AI/crypto play. The company’s 52-week range of $0.53 to $3.27 shows the extreme volatility and downward trajectory that has defined 2025 despite the broader AI and cryptocurrency sectors experiencing substantial growth.
The negative gross margin makes discussion of traditional valuation metrics meaningless, as the company is structurally unprofitable at the most basic level of its operations.
WhiteFiber (WYFI)
WhiteFiber shows how recently public companies trading at aggressive valuations can experience brutal corrections when quarterly results fail to meet the elevated expectations embedded in IPO-era pricing, with shares plummeting as much as 18% intraday following third-quarter results that exposed meaningful shortfalls despite seemingly strong headline growth.
The data center company reported disappointing results:
- Loss of $0.47 per share, coming in $0.31 worse than analyst expectations
- Revenue of $20.2 million fell approximately $1.8 million short of estimates
- Despite representing impressive 65% year-over-year growth
- Cloud services revenue growth of 48% annually fell meaningfully below expectations
The market’s savage reaction to what might otherwise appear as solid growth numbers reflects recognition that the company’s core AI-focused services are failing to capture market share at the rate investors anticipated.
The stock’s performance since going public in August shows the dangers of hyped IPOs:
- Shares now up just 6% from offering price
- Despite broader AI infrastructure sector experiencing substantial appreciation during same period
- Underperformance relative to sector peers suggests company-specific execution challenges
- WhiteFiber may lack competitive advantages necessary to win business in increasingly crowded market
The 28.43% gross margin provides limited cushion for a business still posting significant losses while attempting to build out capacity, raising questions about how long the company can sustain investments without achieving the scale necessary to reach profitability.
Trading at around $18 per share with a market cap of approximately $681 million, WhiteFiber carries a valuation of roughly 7.9 times expected current-year sales despite persistent losses and slowing growth in its core cloud services segment.
The stock’s 52-week range of $14.01 to $40.75 demonstrates the extreme volatility inherent in recently public, unprofitable growth companies, with current pricing approaching the bottom of this range.
Iren Limited (IREN)
Iren Limited shows how accounting gimmicks and aggressive deal structures can temporarily mask underlying cash flow problems, with the AI infrastructure company plummeting 22% this week and now trading more than 35% below its recent all-time high of $76 per share as investors finally scrutinize what lies beneath the impressive headline numbers.
The former Bitcoin mining operation successfully pivoted to AI infrastructure and reported seemingly spectacular fiscal first-quarter results:
- 455% year-over-year revenue growth
- Record $385 million profit
However, astute investors this week recognized that the reported profit included substantial unrealized gains related to convertible notes issued by the company, representing paper profits from financial engineering rather than cash generated from operations.
The company’s capital structure reveals deeper concerns:
- Counting on prepayments from recently announced multiyear, nearly $10 billion cloud computing contract with Microsoft
- To meet some cash needs rather than relying on internally generated funds
- Dependence on customer prepayments to finance data center construction scheduled for early next year and 2027
- Suggests business cannot self-fund growth despite extraordinary revenue surge and reported profitability
This financing structure creates execution risk where delays in receiving prepayments or cost overruns on data center construction could strain liquidity, while the convertible notes that generated the reported profits represent future dilution.
Trading at around $46 per share with a market cap of approximately $13 billion, Iren carries a valuation that assumes seamless execution of its data center buildout, sustained demand for AI infrastructure at current pricing levels, and conversion of revenue growth into genuine cash profitability.
The 31.17% gross margin suggests reasonable unit economics when fully operational, but the reliance on creative financing and accounting treatments to manufacture the appearance of profitability raises fundamental questions about whether the business model can generate sufficient returns.