Investors can certainly boost their returns by concentrating on stocks trading between $1 and $10. However, a disciplined approach is necessary because many of these businesses are speculative and lack the underlying fundamentals to support their prices.
The bad behavior exhibited by lower-quality companies in this space can spook even the most seasoned professionals, which is why we started StockStory - to separate the good from the bad. That said, here are three stocks under $10 to avoid and some other investments you should consider instead.
C3.ai (AI)
Share Price: $8.28
Named after the three Cs of its original focus—carbon, cloud computing, and customer relationship management—C3.ai (NYSE: AI) provides enterprise AI software that helps organizations develop, deploy, and operate large-scale artificial intelligence applications across various industries.
Why Do We Steer Clear of AI?
- Offerings couldn’t generate interest over the last year as its billings have averaged 11.2% declines
- Gross margin of 43.5% reflects its high servicing costs
- Capital intensity will likely ramp up in the next year as its free cash flow margin is expected to contract by 12.6 percentage points
C3.ai’s stock price of $8.28 implies a valuation ratio of 5.8x forward price-to-sales. To fully understand why you should be careful with AI, check out our full research report (it’s free).
Amplitude (AMPL)
Share Price: $5.61
Born from the realization that companies were flying blind when it came to understanding user behavior in their digital products, Amplitude (NASDAQ: AMPL) provides a digital analytics platform that helps businesses understand how people use their digital products to improve user experiences and drive revenue growth.
Why Does AMPL Give Us Pause?
- Struggled to drive increased usage of its software, demonstrated by its subpar 102% net revenue retention rate
- Historical operating margin losses point to an inefficient cost structure
- Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
Amplitude is trading at $5.61 per share, or 2x forward price-to-sales. Dive into our free research report to see why there are better opportunities than AMPL.
Petco (WOOF)
Share Price: $2.81
Historically known for its window displays of pets for sale or adoption, Petco (NASDAQ: WOOF) is a specialty retailer of pet food and supplies as well as a provider of services such as wellness checks and grooming.
Why Is WOOF Risky?
- Weak same-store sales trends over the past two years suggest there may be few opportunities in its core markets to open new locations
- Earnings per share fell by 38.6% annually over the last three years while its revenue was flat, partly because it diluted shareholders
- 6× net-debt-to-EBITDA ratio shows it’s overleveraged and increases the probability of shareholder dilution if things turn unexpectedly
At $2.81 per share, Petco trades at 12x forward P/E. To fully understand why you should be careful with WOOF, check out our full research report (it’s free).
Stocks We Like More
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662%. AppLovin before it ran 753%. Nvidia before it ran 1,178%. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
