2023 has seen a revival in the speculative stocks category. After a dismal 2022, many more adventurous parts of the market are back on the upswing. Cryptocurrency, biotech, and even some former SPACs are perking up.

Not all of these rebounds are justified, however. In the case of these three speculative stocks, huge trouble lies ahead. All three of these speculative stocks are up at least 300% over the past 12 months but are unlikely to hold onto those gains in 2024.

Bitfarms (BITF)

Cryptocurrency is having another moment. The price of leading coins has surged, and even previously dormant markets such as staking and NFTs are starting to show signs of life again.

So it’s no surprise that traders are taking another look at the publicly-traded cryptominers, such as Bitfarms (NASDAQ:BITF), again. BITF stock has doubled over the past month and is up 400% over the past year.

Bitfarms was marginally profitable for a couple of quarters in 2021 when the price of Bitcoin was near its all-time high. It’s not unreasonable to think Bitfarms could at least break even if Bitcoin rebounds to, say, $60,000 per unit.

That said, for the quarter that ended Sept. 30th, Bitfarms lost $19 million on revenues of just $35 million. This suggests the firm is still far from profitability. Even if the price of cryptocurrencies doubled and Bitfarms gains doubled, it would still only make a tiny profit. There’s nothing remotely close to enough here to justify the firm’s bloated $800 million market cap. If you want to bet on the price of Bitcoin, there are almost certainly better options than BITF stock.

Symbotic (SYM)

Symbotic (NASDAQ:SYM) has been one of the year’s most surprising stocks. Shares are up more than 320% over the past year, taking this company’s market capitalization up to $28 billion.

That’s a massive number for a firm that generated just $1.2 billion in revenues in fiscal year 2023. Furthermore, it’s unprofitable. And its business, making industrial warehouse equipment, is not particularly glamorous. So why is the stock at a sky-high price?

That’s because Walmart (NYSE:WMT) gave Symbotic a $12 billion contract to overhaul many of the retailers’ warehouses.

Bulls have painted an enticing picture of Symbotic as a leading AI and robotics firm that will overhaul the industrial automation space. Bears claim Symbotic is not particularly cutting-edge and that this unprofitable industrial firm certainly shouldn’t trade at around 20 times revenues. Short interest is above 20%, and shares could plummet if the firm’s products fail to meet the market’s lofty expectations.

Applied Digital (APLD)

Applied Digital (NASDAQ:APLD) is a company still searching for a business model. The firm’s publicly-traded roots date back to a company involved in potato processing and medical devices.

After these ventures didn’t pan out, the firm pivoted to cryptocurrency in 2020. With that market on a downswing until recently, Applied Digital pivoted to the latest trend, AI.

Applied Digital now claims to be an emerging leader in low-cost AI hosting. However, there is limited evidence of this; revenues remain small and the company is losing money. Moreover, short sellers have questioned the firm’s technical capabilities, leading customers and potential conflicts of interest.

Short interest is sky-high, and traders are probably betting on a short squeeze. But if the underlying technology at Applied Digital is insufficient to make it a major AI player, shares would get pummeled.

On the date of publication, Ian Bezek 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.