Investors can be an optimistic bunch, pushing a stock’s valuation to a level that assumes the best-case scenario is all but assured. This can work out fine if everything goes right, but any speed bump can lead to disaster.
Snap Inc. (NYSE: SNAP), Wayfair (NYSE: W), and Advanced Micro Devices (NASDAQ: AMD) all trade at lofty, optimistic valuations. Investors are betting that all three companies will grow swiftly, eventually justifying those valuations with future profits. Possible? Sure. Likely? Read on to find out.