Concerns about high inflation and the resurgence of COVID-19 in several countries could sustain bearish market sentiment in the near term. Consequently, growth stocks Snowflake (SNOW), Peloton (PTON), Chewy (NYSE:), Teladoc (NYSE:), and C3.ai (AI), which all look overvalued at their current price levels, could witness a decline in the near term. So, we think these stocks are best avoided now. Read on.The major benchmark indexes witnessed a pullback earlier this week on concerns about the spread of the COVID-19 Delta variant in several countries. COVID-19 cases, hospitalizations, and deaths are rising in the United States, and the Delta variant is responsible for 80% of new cases. This, combined with concerns over the ascending inflation rate, has introduced bearish market sentiment.
While many expect the risk-off sentiment to be short-lived and the economic growth to continue, some stocks that have moved ahead of their growth prospects on optimism about continued economic growth might retreat in the near term.
Growth stocks Snowflake Inc. (SNOW), Peloton Interactive, Inc. (NASDAQ:), Chewy, Inc. (CHWY), Teladoc Health, Inc. (TDOC), and C3.ai Inc. (AI) all look overvalued at their current price levels considering their limited near-term growth prospects. So, we believe these stocks are best avoided now.
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