Although the stock market has bounced back after the plunge led by the Delta variant of the coronavirus, certain stocks should be avoided. Ultra-popular stocks NIO (NIO), AMC Entertainment Holdings (NYSE:AMC), and Sundial Growers (NASDAQ:SNDL) have witnessed exceptional rallies this year in part due to social media hype, but their poor fundamentals and hefty losses could lead to a dramatic fall in their share prices in the near term. So, we believe these stocks are best avoided now.After a volatile week, all the major U.S. benchmark indices bounced back ahead of a key July labor market report. The S&P 500 finished at a new all-time high of 4,429.10 on Thursday, as energy and travel stocks recovered after struggling over the past couple of weeks on investors’ concerns over the rapid spread of the Delta variant of the coronavirus.
While the major stock market indexes indicate a bullish sentiment, not all popular stocks are good bets now. Although the social-media-hype led to the skyrocketing rally of some stocks, their weak fundamentals and financials could trigger a brutal decline in their share prices.
Popular meme stocks NIO Inc. (NIO), AMC Entertainment Holdings, Inc. (AMC), and Sundial Growers Inc . (SNDL) enjoyed the limelight solely because of the social-media hype. However, since their current price levels do not match their bleak growth potential and underlying fundamentals, we believe these stocks are best avoided now.