Protect Your Retirement: Avoid These 3 AI Stocks Right Now

By now, you've probably heard about the artificial intelligence (AI) "spending boom" that's powering the stock market's explosive growth. The trouble is, while lots of businesses are investing heavily in AI, those investments alone aren't enough to ensure lasting success. Three AI stocks in particular are looking very risky right now, and probably aren't safe places for retirement savings. Here are the three stocks investors might want to watch out for: Image source: Getty Images. 1. SoundHound AI: A small hound in a big pound It's been a rough year for voice-enabled AI chat platform SoundHound AI ( SOUN 2.66%). News that AI giant Nvidia sold its stake in the company caused share prices to plummet, and a third-quarter earnings report that showed a record generally accepted accounting principles ( GAAP ) net loss of $109.3 million despite record revenue of $42 million prompted further sell-offs. NASDAQ: SOUN Key Data Points The company does seem to be growing revenue from its voice-enabled AI chat platform, which is used primarily by restaurant drive-thrus and in automotive applications. However, SoundHound's 2024 acquisition of agentic AI software company Amelia has given it the opportunity to expand into other customer-service-focused industries, like financial services and healthcare. That said, this technology isn't new and has plenty of existing competition -- Alexa, anyone? -- so success is far from assured. Even after its big share price drops and despite the competitive risks it's facing, SoundHound's stock is still trading at about 30 times trailing sales. That's way more expensive on a price-to-sales basis than most other tech companies. It's even more richly priced than AI leader Nvidia, which currently trades at 25 times trailing sales. Until SoundHound can demonstrate that it can successfully expand into new industries, it looks way too overpriced to buy. 2. BigBear.ai: The AI growth stock that isn't growing BigBear.ai ( BBAI 4.23%) offers several AI products, including data analytics and facial recognition software. It sells primarily to the U.S. military and other government security and intelligence agencies. But it hasn't been nearly as successful as its security-focused AI peer Palantir Technologies ( PLTR 2.64%). BigBear.ai's revenue has been declining for three years, while other AI companies have achieved record sales. That trend doesn't seem likely to change in 2025: Management has issued fourth-quarter revenue guidance of between $24.6 million and $39.6 million. That means BigBear.ai's best-case Q4 scenario is "only" a 9.6% year-over-year revenue decline from Q4 2024's $43.8 million, and its worst-case scenario is a much steeper 44% decline. Compare that to Palantir's guidance of 61% revenue growth in Q4. NYSE: BBAI Key Data Points If BigBear.ai were posting the kinds of margins that other AI companies have been able to manage -- Palantir 's gross margin was 82.5% in Q3 -- it could handle some slight revenue declines and still remain viable. But BigBear.ai's gross margin is among the worst in the industry, at just 22.4% in Q3. That was down from 25% in Q2 2025 and 25.9% in...

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