3 High-Risk Meme Stocks to Make You Rich or Broke

High-risk meme stocks have recently become incredibly popular in the media and across social media platforms. However, wagering on unpredictable assets without substance will be detrimental to long-term investors.

In fostering a well-rounded strategy, it is imperative to focus on developing a diversified portfolio and focusing on a long-term plan.

Stock speculation resembles gambling rather than proper investing. Such practices are unsuitable for investors with long-term objectives. While the market may seem thrilling, it is prudent to exercise caution when considering high-risk meme stocks to buy.

Let’s look at two high-risk meme stocks to avoid and one meme stock to buy in the article.

BlackBerry (BB)

BlackBerry (NYSE:BB) was once a trailblazer in mobile communication but is currently navigating a daunting transition toward the realms of the Internet of Things and cybersecurity.

However, unlike Nokia, the firm’s transition has much to desire. Moreover, its current valuation is outstripping its current performance, with its stock trading at roughly 4.6 times trailing twelve-month sales, almost 70% higher than the sector median.

Its financials paint a sobering picture. It had an 18% dip in sales in its fourth quarter from the previous year to $151 million and a massive quarterly loss of $495 million.

Its cash reserves have dropped from$378 million to $295 million in a year. Revenue growth for the firm has been firmly in the negative in the past 10 consecutive quarters.

Despite the occasional hype as a meme stock, BB has been grappling with multiple losses. Given these circumstances, it’s best to avoid BB stock.

AMC Entertainment (AMC)

Despite the recent uptick in moviegoers, examining AMC Entertainment’s (NYSE:AMC) precarious financial situation is imperative before moving ahead.

AMC’s staggering long-term debt load of almost $4.9 billion looms large, casting a shadow over its performance.

What’s more worrying is that AMC will increase its already hefty debt burden and dilute shareholder value by issuing more shares. This was further evidenced by the $400 million private sale of its senior secured notes.

Such actions will probably backfire, leaving the theatre giant and its stockholders in shambles. It is best to avoid the high-risk meme stock.

During the first quarter of 2023, AMC’s cash burn shot up quarter-over-quarter to 21.5%, with its cash till dropping to $495.6 million. The firm hasn’t been profitable in the last 12  consecutive quarters.

Therefore, AMC stock is incredibly risky, offering little upside potential ahead for investors with a long-term horizon.

Nokia (NOK)

As the 5G revolution continues to accelerate, Nokia (NYSE:NOK) has established itself as a leader in the space. It secured over 286 commercial 5G deals, showcasing its stellar progress in its core divisions. This makes NOK an enticing opportunity for forward-thinking investors.

Under the adept guidance of CEO Pekka Lundmark, Nokia has undergone a remarkable turnaround. Its top and bottom-line growth has witnessed spectacular growth, with year-over-year revenue expansion at more than 13%, while its EBITDA growth is at 23%.

Nokia’s resurgence illustrates not only its robust execution and capital allocation ability, but also its ability to adapt and thrive in the burgeoning 5G market. As we advance, analysts expect the 5G technology market to grow roughly 66% from 2021 to 2030.

On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.