In three months, the stock market has surged more than 40% off of recent lows. It’s been a record-breaking run. And for a lot of companies, these recoveries have been completely justified.

Investors panicked in March and dumped a lot of great stocks at fire sale prices. On the other hand, we’re also starting to see some euphoric trading, where traders have stopped paying any attention to fundamental factors. As long as stocks are going up, momentum traders will keep pressing their bets. That’s caused these seven overvalued stocks to reach unbelievable heights.

And sure, there are plenty of easy targets out there. Many people know better than to invest in something like Hertz (NYSE:HTZ) stock. That company has already declared bankruptcy and warned that its shares are likely to be worthless. Yet shares have gone up more than 1,000% post-bankruptcy filing. That’s pure irrationality.

However, there’s a much more dangerous breed of overvalued stocks where the risk is less apparent. As such, be extremely careful if you hold any of these seven highly overvalued stocks:

• Nikola (NASDAQ:NKLA)
• Boeing (NYSE:BA)
• Pinduoduo (NASDAQ:PDD)
• Shopify (NYSE:SHOP)
• ServiceNow (NYSE:NOW)
• WD-40 (NASDAQ:WDFC)
• XP (NASDAQ:XP)

These companies, by and large, have good stories and positive trajectories. However, their valuations are in no way grounded in reality anymore. And make no mistake, when the market’s euphoric summer fades, these seven names could get utterly obliterated.

Nikola (NKLA)

Nikola has rapidly turned into one of the year’s hottest stocks. The hydrogen truck company has huge ambitions. In fact, founder and executive chairman Trevor Milton said that: “My goal is to take the throne from the Ford F-150, that is my goal.”

While Nikola is years away from seriously rivaling the F-150, its market cap has already overtaken Ford (NYSE:F) and Fiat Chrysler Automobiles (NYSE:FCAU) as of last week. Milton recently tweeted, “I’ve wanted to say this my whole adult life; $NKLA is now worth more than Ford and FCA. Nipping on the heels of GM.”

While all the early momentum and excitement is worth something, stock traders have gotten far ahead of themselves. Nikola isn’t generating revenues yet, and it’s not expected to reach serious production levels until 2023.

There’s also little evidence that hydrogen will be the winning green fuel either. This is a technology that has yet to achieve mass adoption worldwide. Things could certainly work out. But Nikola’s fundamental valuation isn’t anywhere close to Ford yet at this point. It will be years — if ever — until Nikola turns into the next Tesla (NASDAQ:TSLA).

Boeing (BA)

Nikola isn’t the only overvalued industrial company out there. We also have Boeing, whose shares have inexplicably more than doubled off their recent lows. However, don’t be fooled: despite the stock price gains, Boeing was hit hard by the novel coronavirus outbreak, and the fundamentals haven’t changed that dramatically.

The collapse in aviation demand has radically altered Boeing’s forward outlook. Sure, most airline travel will eventually come back. But even if passenger demand returns to 90-95% of previous levels, that’s still dozens, even hundreds of jets that will no longer be needed to serve the 5-10% of passengers that disappeared. And it will be years before the airline industry returns to 2019-levels of profitability.

Numerous airlines such as Avianca (OTCMKTS:AVOHQ) and LatAm (NYSE:LTM) have already gone bankrupt, and more are likely to follow suit before the crisis ends. Airline bankruptcies risk costing Boeing cash and standing orders now, and reduce demand for new jets in future years besides.

If that weren’t enough, don’t forget about the Boeing 737 MAX. Even before the virus hit, Boeing was in serious trouble; people were talking about a government bailout to save the company at that point. And make no mistake, the MAX liabilities are still out there. Adding a subsequent collapse in the airline industry simply took things from bad to worse.

Boeing will probably survive. But at a gigantic $100 billion market capitalization, investors are betting on a return to 2017-19 type prosperity soon. That’s highly unlikely.

Pinduodou (PDD)

The pandemic has been good for a lot of e-commerce companies, and perhaps none more so than China’s Pinduoduo. That country’s advanced digital infrastructure made it easy for online retailers to fill the void when physical retail had to close down. And as China was the first country to go into quarantine, the economic effects of the shock happened sooner there. Thus, investors have had a lot of time to warm up to Chinese online retail.

As a result, the Chinese e-commerce stocks are soaring. JD.com (NASDAQ:JD) is at an all-time high, and Alibaba (NYSE:BABA) isn’t far behind. However, Pinduoduo has really stolen the show, as shares have nearly quadrupled over the past year.

At this point, however, PDD is getting way ahead of itself. Pinduoduo is still generating sizable losses, and isn’t yet on the same level of operational sophistication as JD or Alibaba. Pinduoduo is growing nicely, but at a more than $80 billion market cap, investors are paying a steep price for a company with less than $5 billion in annual revenues and that lost $1.3 billion last year.

Shopify (SHOP)

Pinduoduo isn’t the only overvalued overseas e-commerce play out there either. We also have Canada’s Shopify, which is now that country’s second-most valuable company, trailing only Royal Bank of Canada (NYSE:RY). And, like Pinduoduo, the market is currently valuing it at around $80 billion.

This is, simply put, an outlandish valuation. The company is trading at a P/E ratio of more than 1,000. It generated less than $2 billion in revenues last year, meaning it is currently selling at nearly 50x revenues. Generally 10x sales is considered expensive for a fast-growing tech company, and 20x borders on obscene; 50x is in a whole different universe.

Sure, some people are suggesting that Shopify is going to be the Amazon (NASDAQ:AMZN) of Canada. But there’s simply nothing there yet. $2 billion a year in revenue at break-even profitability is hardly a major enterprise, let alone worthy of being Canada’s second-most highly valued company.

Shopify may well end up joining the likes of Nortel, Valeant, and BlackBerry (NYSE:BB) among Canada’s largest stock wipe-outs of all time once the hype wears off.

ServiceNow (NOW)

It isn’t just e-commerce plays that are reaching unbelievable valuations. Information technology (IT) companies are also soaring to all-time highs. Consider ServiceNow, whose shares are up 33% year-to-date.

This surge is fairly remarkable. Sure, IT will do better than most other things in this economic slowdown. However, analysts are still modeling ServiceNow’s growth rate slowing from the mid-30s to the mid-20s this year thanks to the economic stress.

Despite that growth slowdown, investors have bid ServiceNow up to new record highs. It now sells for a jaw-dropping 20x sales and more than 100x trailing earnings.

ServiceNow is a great company and could eventually deliver strong profits. However, competition is also rapidly intensifying and growth is slowing. Against that backdrop, shares are severely overpriced.

WD-40 (WDFC)

Most investors tend to think of overvalued stocks as big flashy growth companies. And, in most cases, that’s true. However, sometimes absurd overvaluations can pop up in places where you’d least expect them. For example, there’s WD-40, the company that makes its namesake lubricant product, along with a line of other cleaning supplies.

WD-40 was founded in 1953 and has managed to remain an independent company all these years, rather than joining a large industrial conglomerate. And, strangely enough, it has become an absolute rock star; shares are up 480% over the past 10 years.

To be fair, at its core, WD-40 is a good business. Take cheap petroleum and turn it into an expensive branded product, that’s a winning recipe. And demand is pretty stable, even in a recession, people still need to take care of their equipment and machinery.

That said, investors’ demand for “safe haven” stocks has caused an outlandish price here. WDFC stock sells for 42x trailing and 40x forward earnings. And it has grown revenues just 2%/year over the past five years — there’s no hidden growth story to account for this steep valuation.

It’s great to have WD-40 in your garage, but this is not a good time to store it in your portfolio.

XP (XP)

Investors in XP stock have seen big gains in their portfolios recently: XP has nearly tripled off off its March lows.

And while XP may not be a household name yet, the Brazilian fintech company recently surpassed a $20 billion market capitalization. Fans of the company suggest that XP will grow to be the Charles Schwab (NASDAQ:SCHW) of Brazil.

That’s an admirable aim. However, Charles Schwab itself has been in business for decades, is one of the clear leaders of the U.S. brokerage industry and still has a market cap just under $50 billion. It’s hard to imagine that XP, which just did its initial public offering last year, is already worth half of a Charles Schwab.

The valuation figures confirm that: XP’s shares are trading at 86x trailing and 70x forward earnings. They also go for a jaw-dropping 17x sales. Schwab, by contrast, trades at less than 4x revenues.

Of course, there’s more room for upside at an emerging Brazilian brokerage than a dominant U.S. one. Still, the valuation gap is far too steep here, particularly given the difficult moment that the Brazilian economy and government is having right now.

XP stock sold for $20 in April; there’s no need to pay more than $40 for it now.

Ian Bezek has written more than 1,000 articles for InvestorPlace.com and Seeking Alpha. He also worked as a Junior Analyst for Kerrisdale Capital, a $300 million New York City-based hedge fund. You can reach him on Twitter at @irbezek. At the time of this writing, he owned JD stock.