Over the past few weeks, the stock market rally has helped many stocks skyrocket in price. However, not all winning stocks possess fundamental strength. And because many analysts expect the stock market to remain under pressure in the near term, we think ultra-popular stocks Palantir Technologies (NYSE:PLTR), Peloton Interactive (NASDAQ:PTON), Naked Brand Group (NAKD), and Zomedica (ZOM) are extremely risky bets now, given their weak financials and sky-high valuations. Read on.Consumer confidence in the United States dipped to a six-month low in August due to concerns over rising COVID-19 cases and rising inflation. According to a Conference Board survey, the consumer confidence index slipped to 113.8 in August from 125.1 in July, its lowest level since February.
Although strategists believe it's too early to predict a market correction, the risks have been rising with concerns over changes in Fed policy and the rapid spread of the COVID-19 Delta variant. And although solid second-quarter corporate earnings results have driven the major stock market indexes to hover near their all-time highs, many stocks have become highly overvalued.
Amid this environment, ultra-popular stocks Palantir Technologies Inc . (PLTR), Peloton Interactive Inc . (PTON), Naked Brand Group Limited (NAKD), and Zomedica Corp. (ZOM) could witness significant price declines in the near term because their weak growth prospects don’t justify their current valuations. So, we think these stocks are best avoided now.