3 Crashing Stocks I Wouldn't Buy Right Now

David Jagielski, The Motley Fool

Wed, Apr 16, 2025, 5:30 AM 4 min read

The stock market has been crashing this year and if you're a long-term investor, it can be a good time to invest in companies at discounted valuations. But that doesn't mean that you should be investing in just any stock. Some businesses could face significant challenges amid tariffs and some are just too risky to invest in, and cheaper prices don't change that.

Three stocks that are in a free fall right now that I still wouldn't bother buying today are Tesla (NASDAQ: TSLA), Tilray Brands (NASDAQ: TLRY), and Rigetti Computing (NASDAQ: RGTI). Here's what I don't like about these stocks, and why you should think twice before buying them.

Tesla

Shares of electric vehicle maker Tesla are down 37% year to date, and there is no shortage of reasons to explain why the stock is struggling. From CEO Elon Musk's close relationship to President Donald Trump and his controversial policies, to a weak economic outlook and rising competition, there isn't just one problem facing the automaker.

Tesla has been a fantastic growth stock to own over the years but it faces a tough road ahead as consumer demand may not be all that strong in future quarters. Not only has the brand arguably lost some of its luster with people protesting at Tesla dealerships in response to Musk's controversial involvement with the government, but its margins have been shrinking recently due to increased competition.

While the stock declined heavily this year, it still trades at a forward price-to-earnings multiple of 90 (which is based on analyst expectations). It remains a highly expensive stock to own, and the sell-off may not be over just yet.

Rigetti Computing

Down 43% as of this writing, Rigetti Computing stock has been performing worse than Tesla this year. However, it's also a far riskier buy. While Tesla's problems stem from future growth and profitability, Rigetti may not even attain profitability any time soon. The company is involved in quantum computing and the hope from growth investors is that it can benefit from high spend in the tech industry due to artificial intelligence.

The company's quantum computers could revolutionize many industries and make it easier to solve complex problems at lightning-fast speeds. The problem is that it may be a long time before that becomes a reality; not necessarily just a few years, but perhaps a decade and maybe even much longer than that.

In the meantime, Rigetti just doesn't make for much of an investable business right now, simply because it's debatable whether it will be around that long. Last year, it incurred a net loss of just under $201 million on revenue of less than $11 million. And investors are valuing the business at a market cap of around $2.6 billion. It's a hefty price tag for a company with such an uncertain future.

Investing in the company at this early of a stage involves significant risk, and investors shouldn't be surprised if Rigetti shares fall even lower as the market continues to shift away from high-priced, risky investments.

Tilray Brands

Cannabis and beverage company Tilray Brands has crashed by 64% in value this year. Investors simply aren't bullish on the prospects of marijuana legalization, which is usually the necessary ingredient for shares of Tilray to spike. And while the company has been diversifying into alcohol in recent years, that hasn't given investors much of a reason to take a chance on the business.

Tilray reported earnings this month and sales for the period ending Feb. 28 were down by 1%, totaling $185.8 million. The business isn't profitable and over the past nine months, it has burned through $81.8 million. Due to its poor financials, the danger for investors is that frequent share offerings and dilution are a serious, ongoing risk that could send this seemingly discounted stock to even lower levels.

The only catalyst that I think could turn things around for Tilray is if there's talk of the U.S. government considering marijuana reform, but that doesn't appear to be on the horizon.

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David Jagielski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool recommends Tilray Brands. The Motley Fool has a disclosure policy.

3 Crashing Stocks I Wouldn't Buy Right Now was originally published by The Motley Fool

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