Why These Struggling Companies Right Now Deserve Investor Caution

When stocks plunge dramatically—losing over 60% in just twelve months—the temptation to buy the dip can be strong. Yet some struggling companies right now are declining for compelling fundamental reasons that suggest further downside risk. Two tech firms illustrate this cautionary tale: The Trade Desk and C3.ai, both of which have disappointed investors despite substantial market enthusiasm around their respective sectors.

The Trade Desk: A Growth Engine Losing Momentum

The Trade Desk has experienced a particularly steep decline, with shares down 72% over the past year. Operating in the competitive digital advertising technology (adtech) space, the company faces mounting pressure from multiple fronts. Advertisers are increasingly cautious about spending amid economic uncertainty, directly impacting the platform’s revenue visibility.

Beyond market headwinds, internal management instability has compounded investor concerns. The company recently announced yet another leadership transition in the CFO role, with Tahnil Davis assuming the interim position on January 26, 2026. This marks the second CFO change within months—Alex Kayyal was appointed to the role last August, replacing Laura Schenkein. Such rapid executive turnover raises questions about organizational stability and strategic clarity.

Perhaps most troubling for growth-focused investors is the company’s decelerating growth trajectory. The expansion rate has contracted from 27% to 18% in the most recent quarter—a significant deceleration for a company whose valuation premium has traditionally been justified by rapid scaling. Despite the dramatic stock decline, the company still commands a valuation of approximately 40 times trailing earnings, which many investors view as unjustifiably expensive given the present uncertainty.

C3.ai: AI Promise Meets Revenue Reality

C3.ai’s struggling companies profile reflects a different but equally concerning challenge. With a 61% decline over twelve months, the artificial intelligence firm has failed to translate sector excitement into tangible business growth. CEO Stephen Ehikian recently took the helm from longtime founder Thomas Siebel, signaling that leadership change alone may be insufficient to reverse momentum.

The company’s financial trajectory tells a sobering story. Over the six-month period ending October 31, 2025, total revenue actually declined by 20%, reaching $145.4 million. Simultaneously, losses have substantially widened, expanding from $128.8 million across the previous two quarters to $221.4 million—a troubling deterioration on the bottom line.

Despite offering an extensive portfolio of over 130 enterprise AI solutions, C3.ai has struggled to demonstrate the adoption and revenue expansion that the AI narrative demands. Without clear evidence of a recovery in the pipeline, the stock presents limited near-term upside regardless of further price declines.

Evaluating Risk When Growth Stalls

What makes these companies particularly risky right now is the combination of structural challenges facing investors. Both firms are caught in sectors with legitimate long-term potential—artificial intelligence and digital advertising—yet both are executing poorly relative to market expectations. For struggling companies right now, the key distinction becomes whether current declines represent buying opportunities or early warnings.

The Motley Fool’s research team has specifically excluded The Trade Desk from its list of recommended holdings, a telling signal for investors considering entry points. History suggests patience can pay substantial dividends: investors who followed similar guidance to purchase Netflix in 2004 would have seen a $1,000 initial investment grow to $456,457. Those who bought Nvidia on recommendation in 2005 would have achieved $1,174,057 on the same $1,000 stake.

The Bottom Line: Wait-and-See Discipline

For investors evaluating whether to buy struggling companies right now, the evidence suggests maintaining distance from both C3.ai and The Trade Desk until management can demonstrate sustained operational improvements. The recent managerial instability at The Trade Desk and the persistent revenue contraction at C3.ai aren’t temporary headwinds—they’re fundamental warning signs that deserve investor respect.

Stock prices can always decline further, a reality that should temper enthusiasm even when valuations appear depressed. Rather than chasing fallen angels, prudent investors typically benefit from waiting for clearer evidence of business stabilization before committing capital.