The artificial intelligence (AI) revolution is in full swing and I think there will be a fair few business models disrupted by this technology in the coming years. Indeed, there already have been some, including penny share Chegg (NYSE: CHGG).

In 2021, this online education company had a share price of $113 and a market cap in the $14bn region. Now, those figures stand at $1 and $112m, respectively.

In other words, the stock has lost 99% of its value!

What the heck has happened?

For those unfamiliar, Chegg offers textbook rentals, online tutoring, study resources, and homework help, primarily for college students through its subscription-based platform.

Unfortunately for Chegg, these are the sort of things that students can increasingly get from AI chatbots for free. In fact, since ChatGPT was released in November 2022, the stock has crashed 96%. So there is a direct correlation.

In Q4 2022, the company reported revenue of $205m. For Q1 2025, it is now guiding for revenue of around $115m. So there has been a significant decline in the past couple of years.

Meanwhile, the number of subscribers has fallen from 5m in Q4 2002 to 3.6m in Q4 2024. Chegg has also turned unprofitable over this period, with an adjusted net loss of $160m on revenue of $617m last year.

Double whammy!

But here’s where the plot thickens, and not in a good way for Chegg. You see, the rise of generative AI bots like ChatGPT didn’t just threaten Chegg’s business model. It also posed a risk to Google’s search empire because people might get the info they want by asking an AI bot (thereby bypassing all those ads on Google’s search pages).

In response, the tech giant rolled out AI Overviews (AIO) in May 2024. These are AI-generated summaries that appear at the top of search results, providing users with concise answers to their queries without requiring them to visit external websites.

Alas, Chegg says AIO has had a “profound impact” on traffic flowing to its site. Non-subscriber traffic plummeted to negative 49% in January 2025, down significantly from the modest 8% decline it reported in Q2 2024.

As the firm puts it, “Google AIO has transformed Google from a “search engine” into an “answer engine,” displaying AI-generated content sourced from third-party sites like Chegg“. In other words, the firm is saying Google is using its proprietary content while driving less traffic to its site.

The company has announced it is suing Alphabet-owned Google.

Foolish takeaway

To be fair, Chegg is just chugging on with product development. It has integrated AI and machine learning into its product stack, while its language learning service (Busuu) is growing strongly.

At the same time, the company said its launching a “strategic review process“. That sounds like it might be open to a sale to me. If so, perhaps it will be acquired for a far higher valuation than $112m.

I wish Chegg luck, but this stock is far too risky for me.

More broadly, it serves as a cautionary tale of AI disruption. More than ever, I think it’s crucial to make sure the software/tech companies we’re invested in aren’t vulnerable to being disrupted by AI. The technology is likely to cause as much value destruction as creation.

Shares of Axon Enterprise (NASDAQ: AXON) have been incredibly volatile in February. In fact, before today (26 February), this growth stock had lost 30% of its value in a single week. But today it’s up 15%!

What on earth’s going on here?

Overblown worry

This has been one of the best-performing stocks of the past two decades. Originally known for its Taser stun guns, Axon has built a powerful business centred around officer body-cams, a digital evidence management platform, and various software products.

This law enforcement ecosystem is very sticky and creates predictable and growing recurring revenue.

The reason the stock had been falling prior to today was due to its high valuation, with a couple of analysts downgrading it from Buy to Hold on valuation grounds. Currently, the stock trades at a lofty forward price-to-earnings (P/E) ratio of around 90.

One analyst also highlighted Axon’s cancellation of a partnership with Flock Safety. This company specialises in automated license plate recognition technology. Axon also makes dash cameras for police cars, so there was some technology integration between the two firms.

Axon says Flock made customers pay higher fees to use Axon’s technology, so it pulled out. However, new partnership terms have been proposed and the issue has been “somewhat overblown“, according to management.

Rock-solid quarter

The stock exploded upwards today because of the firm’s excellent Q4 results, released yesterday. Revenue jumped 34% year on year to $575m, representing the 12th consecutive quarter of growth above 25%. That was better than Wall Street’s expectation for $566m.

Particularly impressive was its Axon Cloud & Services segment, which grew 41% to $230m (40% of revenue).

Free cash flow generation was $225m in the quarter, though there was an operating loss of $16m due to increased stock-based compensation of $131m. The company does pay out a lot of bonuses in the form of shares, which is something worth noting.

Full-year revenue surged 33% to $2.1bn. That’s nearly double the amount it reported only two years ago, and it was the firm’s third consecutive year of growth above 30%. It achieved a record full-year net profit margin of 18.1%.

Massive TAM

Axon now has more than 1m users of its software solutions, spanning evidence management, real-time operations, productivity, and artificial intelligence (AI). And it booked over $5bn in business last year, with about half of that closing in Q4. This brings the total future contracted bookings to $10.1bn. 

Management also increased the overall total addressable market (TAM) to $129bn. Now, it’s always best to take TAM projections with a grain of salt. But given that Axon’s revenue totalled $2.1bn last year, it’s clear the company looks set for many more years of strong growth.

Looking ahead to 2025, Axon expects revenue of $2.55bn-$2.65bn, approximately 25% growth, and adjusted EBITDA of $640m-$670m, representing roughly a 25% margin.

Firing on all cylinders

One risk worth noting is US government spending cuts, which could slow down contract wins in Axon’s federal business. While the firm thinks this is in fact a big opportunity (its software supports automation and boosts productivity), it’s still something worth watching.

Overall, the company is firing on all cylinders, and the market is rewarding that progress today. Despite the high valuation, I think the stock is worth considering for long-term growth investors.

Buying a stock that has fallen in value and is still dropping is one thing. Buying a growth share that has fallen but has now started to move back higher is another matter. The latter is sometimes a better option for investors to consider, as green shoots are already starting to emerge. Here’s one FTSE 250 stock that I’ve spotted that fits into this category.

Problems in the recent past

I’m talking about Pets at Home Group (LSE:PETS). Today (26 February), the stock is up 6.5%, helping to erase a chunk of the 21% fall over the past year.

Back in the middle of January, the stock hit its lowest level in five years. There are a few key reasons for the underperformance, especially in the past two years. During the pandemic, there was a surge in pet adoptions and general pet ownership. The business benefited from this, with higher sales of pet-related products and services. Yet since then, there has been a market adjustment, with a decline in pet ownership growth.

The company also bad press late last year due to an investigation from the UK Competition and Markets Authority. It’s still investigating pricing practices in the veterinary sector, including those of Pets at Home. We’ll have to see what happens in the future with the outcome, but it has already negatively impacted the company image.

Why things have changed

In the past month, the stock has started to rally. Of course, this might just be a short-term move that could fade away. Yet there are signs that a larger-scale comeback is on the cards.

One reason for the change in sentiment came following reports that private equity firm BC Partners might be preparing a takeover bid. As bizarre as it sounds, this speculation arose after the registration of companies with ‘pug’ in their names, sharing an address with BC Partners. Nothing has been confirmed from either side, but investors have reacted positively to the potential acquisition rumours. Given the low current valuation, it doesn’t surprise me that potential buyers could be looming in the background.

I’m not saying to consider buying the stock based on a buyout. But instead it goes to show that clearly some feel the company is undervalued.

Another factor was the quarterly trading statement that came out at the end of January. It detailed how consumer revenue was up by 2.3% versus the same period last year, with an impressive 27% jump in the percentage of revenue that came from consumer subscriptions. It also maintained the full-year profit guidance, which likely provided some relief for investors.

The bottom line

I think the growth stock has put the worst days behind it. Of course, the regulatory investigation remains an ongoing risk. Yet, based on the change in sentiment over the past few weeks, I believe it’s a stock for investors to consider right now.

Deliveroo (LSE: ROO) could be one of the UK’s great 21st-century success stories. It only formed in 2013 but posted £2bn revenue last year and already reached the FTSE 250. The firm delivers a million meals a week up and down the country and has expanded across Europe and Asia as well. 

All the hallmarks of a thriving business are present, and yet I won’t touch the shares with a fairly lengthy bargepole. Here’s why. 

Growth needed

To start with, billions in revenue doesn’t mean you actually make any money. And a lack of earnings has been something of a theme of Deliveroo’s operations so far. Granted, it turned a profit last year for the first time and dividends are already being mentioned. But the firm is trading at 45 times forward earnings. That’s not a good buy for me without a hefty chunk of earnings growth. 

Now, you might say, many unprofitable companies go on to be terrific buys. This is indeed true. I remember seeing Reddit IPO last year having not made a cent since 2008. But it turned a profit a couple of quarters later and the shares are up about four times in value since then. That’s often the story with these fledgling, jam tomorrow-type stocks. I accept it could be the case with Deliveroo. 

Where things start to fall down for me is the business model. Deliveroo’s pricing is around £3 per order. That’s an acceptable amount to get food delivered, but is there room for increases in order to grow earnings? I think that while a rise in the fee could help boost profits, there’s also a risk it could deter some customers and the company has made no suggestion that it’s even considering such an increase. That’s understandable, as surely folks wouldn’t want to pay much more to get sent a couple of Hawaiian poke bowls (the firm’s most popular order, by the way).”

Regulatory issues

On the other side of things, I don’t think there’s much fat to trim from operations either. The firm relies on cheap labour in a sector with lots of competition. With other big delivery services competing for business, it’s hard to see much room for margin expansion here either.

There’s the question of regulation too to take into account which is always a threat in these nascent gig economy types operations.

All in all, there are a lot of questions here. Can Deliveroo deliver (ahem) on earnings growth or win market share against the competition? Can it avoid the regulatory hammer? Maybe management has all the answers, the stock flies up and I look back in 10 years with egg on my face. 

I wouldn’t be overly surprised. The firm’s rise so far has been exceptional. It has millions of regular customers and other investors are putting a heady valuation on the shares. In any case, it’s not a buy for me today.

The FTSE 100 has been in sprightly form in 2025 so far. Sadly, not every member of the index has been in such fine fettle. I’m talking about JD Sports Fashion (LSE: JD) shares.

Shockingly poor performance

A fall of 15% since markets re-opened in January makes this one of the worst-performing top-tier stock in 2025 so far. Put another way, if an investor had put in £10,000, they’d be sitting on around £8,500 today.

If you think that’s bad, spare a thought for those who snapped up the shares 12 months ago. The price is down almost 30% over that period. Over five years, the company has nearly halved in value!

Granted, investors would have received dividends over those longer periods. But JD Sports’ growth-focused strategy means that it’s never been one to get excited about from an income perspective.

Right now, the yield sits at just 1.3% for FY26. A bog standard savings account would generate far more in interest without any of the risk that comes with investing.

Green shoots?

To be fair, all retailers have faced multiple headwinds for a long time, including a global pandemic and a cost-of-living crisis. On the downside, there are plenty of reasons to think that things could get even worse before they get better.

Inflation is creeping back up and consumer confidence remains fragile at best. We know that at least one of the key brands that the company sells — US trainer titan Nike — has lost some share to more innovative rivals too. On top of all this, higher National Insurance contributions from April will end up costing the firm millions of pounds.

But I still think JD has a lot going for it.

The company is continuing to expand overseas, making it increasingly less dependent on sales in its home market. The capture of Hibbett in the US, for example, will give it a much more prominent footprint across the pond. I also like the fact that this is not a company that engages in indiscriminate discounting to match rivals. This helps to maintain brand value and support profitability over the longer term.

There are a couple of other things that some retail investors might not know.

First, there’s very little interest in this stock from short sellers — traders who are betting that a company’s share price has further to fall. Second, CEO Regis Schultz has recently added to his own holding to the tune of £100,000.

Both of the above make me cautiously optimistic that the worst might be over.

Screamingly cheap!

Sure, JD Sports shares have been a dog of an investment for some time. But history shows that putting money to work when things are least comfortable has the potential to deliver outsized profits. I’d say we’re there now.

An update on trading in the fourth quarter is due near the end of March. While it’s possible that the shares could sink even lower, there’s also a chance that they could explode upwards if things are even marginally better than expected.

Although no one knows for sure, I’m inclined to think it will be the latter. The shares already trade at a very low forecast price-to-earnings (P/E) ratio of just over six.

Consequently, I reckon JD Fashion shares are worth considering today.

Carmaker NIO (NYSE: NIO) has certainly delivered some turns in the road for investors. A 93% fall in NIO stock since January 2021 means a much faster, further downhill ride than many would like. But, over five years, investors would still be up (albeit only by 3%).

But this could turn out to be a key year for NIO and its share price, I believe. Here’s why.

EV market-reckoning could be here

For some years, the electric vehicle (EV) market has been in the early stages of commercial development. Early adopters have given way to an increasingly mainstream customer set, new companies have piled in and carmakers have focused as much on technology development as scaling commercially viable business models.

I think that is now changing. A few large makers like Tesla and BYD are increasingly reaping the volume rewards of large-scale, long-term investment building their brands and developing technology.

The key question facing NIO is whether it can join the big boys, or fade away into insignificance.

But I reckon it has what it takes. Last month for example, its vehicle deliveries (heading towards 14,000) were 38% higher than last January.

Dilution risks, but long-term potential

What NIO does not yet have, unlike Tesla and BYD, is a proven business model. While revenues for its most recent quarter came in at around $2.6bn, the net loss for the period was roughly $721m.

With around $6bn of cash and cash equivalents, restricted cash, short-term investment and long-term time deposits on its balance sheet at the end of the quarter, NIO can keep burning cash for a while. But at its current rate it will probably need to raise more funds within the next two to three years, if not sooner.

That brings a clear risk of shareholder dilution. I think the tumbling NIO stock price reflects investor concern about cash burn.

If NIO can keep growing sales volumes that let it spread its fixed costs, it could move closer to breaking even, in which case the stock price could potentially soar. I reckon the firm’s distinctive car design and proprietary battery swapping technology could help it gain sales.

On the other hand, even if sales do grow, if NIO keeps burning cash like a drunken sailor, its business model will remain unproven and investors could mark the stock value lower even from here.

I think the coming year could turn out to be an important one for the business, as the rapidly evolving EV market could provide clearer guidance on how likely NIO is to succeed over the longer term.

I’m in wait-and-see mode

I have invested in loss-making, unproven businesses before now but have learnt my lesson and prefer not to.

Sometimes I am tempted – and I do see a lot to like about NIO. But for now I think the risks are too great for my tastes. I would rather wait, even if it means missing out on the chance to invest at today’s stock price, and see whether NIO can prove its business model more before I put any money into it.

Tesla (NASDAQ: TSLA) shares come with volatility built in as standard. If they were a car, you’d be wise to steer clear.

But Tesla stock isn’t a car. It’s been one of the most exciting and rewarding investments in the world over the last. And today it’s going cheap. Possibly.

As I write this, on Wednesday (26 February), the Tesla share price has fallen 14.42% in a week. It now trades at $302.8. If an investor had slipped £10,000 into the stock one week ago, hoping to take advantage of this year’s volatility, they’ll be looking at a £1,442 paper loss. Their £10k has shrunk to £8,558… in just five trading days.

Elon Musk never promised us a smooth ride

Some investors will look at that and blench. Others will spy a buying opportunity. Taking advantage of the dips has been a winning strategy for Tesla investors, again and again.

History suggests Tesla could make that up in short order. The stock’s still up 51% over 12 months. Over five years, it’s up 580%. As with so many things about Tesla, my mind boggles.

Yet these are strange times for Tesla, as the world adjusts to the second Donald Trump presidency, and Musk’s role in it. Musk risks spreading his genius too thinly. Can one human body and brain take that much?

Tesla electric vehicle (EV) sales are plunging across Europe, plunging 63% in France and 60% in Germany. Some put that down to a political backlash. EV buyers also have more choice, though, as China makes plays catch up

Full-year profits plunged 53% to $7.1bn, Tesla’s worst performance since 2021. Free cash flow dropped 18% to $3.6bn.

It’s not just about EVs

Tesla’s battery energy storage business is growing much faster than the car business, as Musk previously predicted. Revenues jumped 67% with deployments up 114% to an unprecedented 11 GWh. That helped to lift the stock above $404 on 31 January. It’s lost $100 of that since. Bitcoin’s plunging too. They often move in lockstep.

Yet there’s more! There always is with Musk. There’s self-driving vehicles, robotaxis, artificial intelligence (AI), humanoid robots and other futuristic stuff to captivate investors.

Many will see the Tesla stock dip as a huge opportunity. But they shouldn’t be lured into thinking the shares are cheap. Its price-to-earnings (P/E) ratio’s still a mighty 148.55 times (although I remember when Tesla’s P/E topped 1,000).

Lately there’s been talk of a wider shift out of US shares, which look relatively pricey after their powerful run. The S&P 500‘s up just 1.25% this year, trailing the FTSE 100 that’s up 4.95%.

However, much of that talk may be premature. Betting against Tesla and the US has been a losing trade for more than a decade.

By contrast, brave contrarians may consider this a brilliant buying opportunity. They may be right. I wish them luck. I decided I’d missed out on the best part of the Tesla growth story way back, and I’m sticking with that. It’s just too risky for me. And yes, I’ll probably end up kicking myself all over again.

Dividend forecasts are really useful pieces of information that I don’t think are appreciated enough. Of course, no one can perfectly predict what future income a company will pay out.

But based on opinions from analysts and brokers, the projected figures can be a good indicator whether a stock should be worthy of consideration. Here’s one investors might find interesting.

Solar flair

Foresight Solar Fund‘s (LSE:FSFL) a UK-based renewable energy investment that primarily targets solar assets (as the name suggests). The share price is down 16% over the past year, which is one factor that’s pushed up the dividend yield to 10.81%.

The FTSE 250 stock makes money by generating revenue from the portfolio of large solar farms. These assets generate electricity, which is then sold to the grid or through Power Purchase Agreements (PPAs) with businesses. When buying new assets, the fund focuses on operational solar farms with a proven track record. This is a good thing, as it reduces the development risk associated with new or unproven sites.

Given the relatively stable nature of the cash flow from the contracts, it’s logical that dividend investors would find this stock appealing. Over the past few years, the business has been paying out quarterly dividends. These have been rising, with the latest dividend declared earlier this month of 2p, matching the past three quarters.

Forward-looking

Analysts expect the next dividend (declared in June) to rise to 2.1p per share. In June 2026, the expectation is for a further increase to 2.19p per share. So in theory, the 2026/2027 total dividend payable could be 8.76p (2.19p x 4). If I use the current share price of 75p, this would equate to a dividend yield of 11.68%.

If an investor puts £5k in Foresight stock today, this could mean that in the period in question (2026/2027), the dividends could equate to £584. But this doesn’t include the dividends that would be paid before then. If I were to assume that the dividend yield would average around 11% from now for the next five years and that an investor took the income and bought more of the stock, the passive income payments would compound even faster.

A £5k investment now with a yield of 11% would mean that in year six, an investor could receive just over £1k from dividends.

Keeping our feet grounded

Forecasting income in years to come isn’t an exact science. There are risks involved. For example, the share price could fall further, meaning that an investor would have a loss on the initial capital. This could happen if electricity prices fall. A significant portion of the firm’s revenue depends on electricity prices, which can fluctuate due to market conditions.

Even with the risks, I think it’s a high-yield opportunity that investors should consider to complement an existing income portfolio.

It’s not unusual to find some of the best UK dividend shares on the FTSE 250. The smaller market caps mean it’s prone to more extreme price fluctuations. This can lead to inflated yields as the two metrics are inversely correlated.

Naturally, nobody wants to invest in a high-yield dividend stock just to watch the share price plummet. So when evaluating UK stocks for passive income, it’s crucial to assess where the price might be heading.

With an eye-catching 11.2% dividend yield, Ashmore Group (LSE: ASHM) stands out as one of the highest-paying stocks on the index. But is this a genuine dividend gold mine, or is the yield too good to be true? 

I took a closer look at the company and assessed the pros and cons of investing in it.

High yield, moderate value

Ashmore Group is a specialist emerging markets investment manager, overseeing billions in assets across fixed income, equities and alternative investments. The company’s expertise in developing markets has helped it carve out a niche, while also exposing it to global economic volatility.

At around 11.2%, its yield is well above the average for FTSE 250 dividend stocks. However, this is partly due to its falling share price, which has declined since early 2021.

Some concerns have been raised by shareholders, including outflows and declining assets under management (AUM). However, the firm has maintained its dividend despite these challenges, raising questions about its sustainability.

Earnings also suffered recently, missing expectations by 36% in the second half of 2024. That’s no small miss and naturally, a cause for concern. Fortunately, things seem to be improving, with earnings up 5.7% in the first half of 2025.

The shares seem fairly priced, with a moderate price-to-earnings (P/E) ratio of 14.4 — down from 45 in early 2023.

What are the risks?

The main thing that worries me is the dividend sustainability. A high yield is attractive but it can also be a red flag. With profits under pressure due to declining AUM, some analysts question whether Ashmore’s dividend policy is too generous and at risk of being cut.

Adding to this worry is the question of emerging markets. With its performance closely tied to emerging economies, it could suffer high volatility due to currency fluctuations, political instability or changing interest rates.

And last but not least, share price performance has been less than impressive. The stock has been on a downward trend for several years, significantly underperforming the broader market. A declining share price can sometimes indicate structural issues within a company.

On the plus side

The double-digit yield is undeniably appealing for income-focused investors. It also has a track record of consistent payouts and its strong balance sheet suggests it can continue rewarding shareholders in the near term.

Despite asset outflows, the company has minimal debt and is still profitable. Its high operating margins and cost efficiency could help sustain dividends even in difficult market conditions.

Its exposure to emerging markets, while risky, also offers benefits. At times, such markets have delivered higher long-term returns compared to developed economies. If capital flows into these regions recover, Ashmore’s assets under management could rebound, boosting profits and share price performance.

Overall, I think Ashmore is a stock worth considering for dividends.

The Aston Martin Lagonda (LSE:AML) share price plunged in early trading today (26 February) after the FTSE 250 icon published its 2024 results.

These revealed an 8.9% fall in the number of vehicles sold. As a result, revenue was 3% lower, at £1.58bn. The post-tax loss increased to £323.5m from £226.8m. Even allowing for one-off items of £33.6m, the result is worse than in 2023.

The gross profit margin also fell by 2.2 percentage points.

At 31 December 2024, net debt had widened to £1.16bn from £814m.

Personally, I think the result is disappointing. And investors appear to agree with me.

When the company released its 2023 results, it said: “2024 is expected to deliver another year of significant strategic and financial progress as we continue the ongoing product portfolio transformation.”

Oh dear. As they say, it’s difficult to make predictions, especially about the future.

Looking in the rear view mirror

In November 2024, the company had to raise £210m through a combination of debt and equity.

New shares were issued at a price of 100p. Those who subscribed at the time have done well. Prior to today, the share price had increased 10%. However, long-standing investors have had little to cheer about.

But I don’t think this poor performance should come as a surprise to anyone. Since its formation, the company’s survived seven bankruptcies. At IPO, it was valued at £4.3bn. Today, its market cap is around £1bn.

The company made its stock market debut in October 2018. Since then, it’s sold 40,937 cars at a combined loss after tax of £1.85bn, or £45,289 per vehicle. Think about this. It would have been cheaper to give each of these customers £40,000 to go and buy a car from someone else!

Year	Profit/(loss) after tax (£m)	Cars sold
2018	(57)	6,441
2019	(118)	5,862
2020	(411)	3,394
2021	(189)	6,178
2022	(528)	6,412
2023	(227)	6,620
2024	(324)	6,030
Totals	(1,854)	40,937

Further down the road

Despite this doom and gloom, the directors appear to remain positive.

They expect a “material improvement” in 2025, including positive adjusted earnings before interest and tax after 2024’s negative £82.8m.

And despite falling in all other regions, revenue in the US increased by 39%, in 2024. Taking the group as a whole, during the second half of the year, sales volumes were higher than 12 months earlier.

The company’s also managed to raise its average selling price to £245,000.

I wonder if a takeover could be on the cards. Its current stock market valuation certainly makes it vulnerable to an approach.

Ironically, last week, Amazon MGM Studios took “creative control” of the James Bond franchise, Aston Martin’s most famous customer. It wouldn’t surprise me if the car maker faced a similar fate. With its cool reputation, exciting vehicles and exposure to Formula One, I’m sure there are plenty of rich business people who’d like a go at running the company. However, this isn’t a sensible basis on which to buy shares.

Call me old-fashioned, but I like the companies I invest in to be profitable. Unless there’s a clear path to profitability, I don’t want to buy stocks that are losing money. And given Aston Martin’s recent dismal financial performance, I don’t see how it’s going to consistently deliver a post-tax profit. For this reason, I don’t want to buy the luxury car maker’s shares.