Stocks to sell

3 Meme Stocks That Could Fade Away in 2024

During the meme stocks rally of 2021, it seemed that all potential meme stocks skyrocketed. The speculative activity peaked, and short-squeeze rallies delivered multi-bagger returns in weeks. The euphoria was, however, short-lived. Investor interest in meme stocks remains high, and there continue to be opportunities to make quick money in the blink of an eye.

However, there is one major difference between now and 2021. Not every meme stock that investors touch will turn gold. Investors need to exercise caution and remain selective even for speculative stocks.

In my view, some meme stocks will likely fade away. High short interest in these stocks would not necessarily imply a short-squeeze rally. These are the meme stocks, and this column discusses three names that might continue to erode wealth in 2024.

Let’s discuss the reasons to be bearish on these meme stocks.

Lucid Group (LCID)

Electric car or EV car charging in station on blurred of sunset with wind turbines in front of car on background. Eco-friendly alternative energy concept. best battery stocks to buy

Source: Smile Fight /

From being touted as the Tesla (NASDAQ:TSLA) competitor, the fall for Lucid Group (NASDAQ:LCID) has been significant. Factors contributing to the decline include intense industry competition, slow execution of plans, and significant cash burn. Back in November 2021, the stock was trading above $55. Two years later, it’s a penny stock with a short interest of nearly 28%.

Even the weakest names might have a speculative rally in a euphoric bull market. However, we are far from a full-fledged bull market. Market participants will continue to ignore LCID stock even at current levels. I must add that there is no major positive catalyst on the horizon.

It’s true that Lucid is well financed through 2024. However, I expect cash burn to sustain for the next few years. Further dilution of equity is on the cards. Also, Lucid Gravity is unlikely to save the Company, given the response of earlier models and the sluggish production. LCID stock is, therefore, among the top meme stocks to avoid.

Novavax (NVAX)

Photo of test tubes and droplet with purple and reddish-orange sunset visual effect, representing biotech

Source: Image

In the last 12 months, Novavax (NASDAQ:NVAX) stock has plunged by 67%. However, I don’t see any hope, and a short interest of 40% indicates a bearish outlook for the stock. I would not bet on a short-squeeze rally because fundamental developments remain negative.

Novavax was in the limelight during the pandemic. The Company was in the vaccine race, and NVAX stock skyrocketed. However, Novavax was a laggard, and even with vaccine authorizations, the Company did not have an addressable market.

Besides the vaccine against COVID-19, the Company is working on clinical trials for seasonal influenza. However, even with COVID-19 and malaria vaccine authorization, the stock has remained depressed. It’s a clear indication of the weak market potential these vaccines hold.

I would, therefore, steer clear of NVAX stock with no major fundamental triggers. Cash burn is also likely to be sustained as Novavax invests in building a deeper pipeline.

ChargePoint (CHPT)

A close-up of an orange ChargePoint (CHPT) station.

Source: JL IMAGES /

ChargePoint (NYSE:CHPT) stock has been another wealth destroyer with a downside of almost 70% for year-to-date. I don’t see any hope for CHPT stock in 2024, and it’s among the top meme stocks to avoid.

The first reason to be bearish is that the EV charging industry is getting intensely competitive. I prefer to look at Blink Charging (NASDAQ:BLNK), which seems like a better option among peers. Further, if we look at the bigger names, Tesla’s EV charging business will create value in the coming years.

An important point to note is that ChargePoint reported revenue of $110 million for Q3 2024. Revenue declined on a year-on-year basis by 12%. This comes when peers have reported stellar revenue growth, even with cash burn.

ChargePoint reported an operating loss of $154 million on the cash burn front. Losses widened on a year-on-year basis. Losses have widened even for the first nine months of fiscal year 2024. Financial metrics are, therefore, poor, and ChargePoint would need to dilute equity next year. This can potentially trigger another round of sharp selling.

On the date of publication, Faisal Humayun did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Faisal Humayun is a senior research analyst with 12 years of industry experience in the field of credit research, equity research and financial modeling. Faisal has authored over 1,500 stock specific articles with focus on the technology, energy and commodities sector.

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