2 Volatile Stocks with Solid Fundamentals and 1 to Question

Volatility cuts both ways - while it creates opportunities, it also increases risk, making sharp declines just as likely as big gains. This unpredictability can shake out even the most experienced investors.

At StockStory, our job is to help you avoid costly mistakes and stay on the right side of the trade. That said, here are two volatile stocks with massive upside potential and one best left to the gamblers.

One Stock to Sell:

C3.ai (AI)

Rolling One-Year Beta: 2.54

Founded in 2009 by enterprise software veteran Tom Seibel, C3.ai (NYSE:AI) provides software that makes it easy for organizations to add artificial intelligence technology to their applications.

Why Are We Wary of AI?

1. 16.4% annual revenue growth over the last three years was slower than its software peers
2. Gross margin of 59.9% reflects its high servicing costs
3. Long payback periods on sales and marketing expenses limit customer growth and signal the company operates in a highly competitive environment

At $20.49 per share, C3.ai trades at 6x forward price-to-sales. Read our free research report to see why you should think twice about including AI in your portfolio.

Two Stocks to Watch:

Freshworks (FRSH)

Rolling One-Year Beta: 1.84

Founded in Chennai, India in 2010 with the idea of creating a “fresh” helpdesk product, Freshworks (NASDAQ: FRSH) offers a broad range of software targeted at small and medium-sized businesses.

Why Does FRSH Stand Out?

1. ARR growth averaged 21% over the last year, showing customers are willing to take multi-year bets on its offerings
2. Prominent and differentiated software results in a premier gross margin of 84.3%
3. Operating margin expanded by 9.3 percentage points over the last year as it scaled and became more efficient

Freshworks’s stock price of $12.78 implies a valuation ratio of 4.8x forward price-to-sales. Is now the time to initiate a position? Find out in our full research report, it’s free.

KBR (KBR)

Rolling One-Year Beta: 1.05

Known for projects like the construction of Guantanamo Bay, KBR provides professional services and technologies, specializing in engineering, construction, and government services sectors.

Why Do We Like KBR?

1. Demand for the next 12 months is expected to accelerate above its two-year trend as Wall Street forecasts robust revenue growth of 14%
2. Operating profits increased over the last five years as the company gained some leverage on its fixed costs and became more efficient
3. Improving returns on capital suggest its past investments are beginning to deliver value

KBR is trading at $51.28 per share, or 13.6x forward price-to-earnings. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.

Stocks We Like Even More

Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.

While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years.

Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Comfort Systems (+751% five-year return). Find your next big winner with StockStory today for free.