A concentrated grouping of tech stocks is responsible for rallying markets in 2023. In fact, a Forbes article from late April noted as much, stating that seven stocks were responsible for 90% of the S&P 500’s gains to that point. At the time, Apple (NASDAQ:AAPL) was the biggest contributor, adding $549 billion in market capitalization. Nvidia (NASDAQ:NVDA) hadn’t fully exploded by that point but year-to-date has increased in value by $620 billion on massively positive AI tailwinds. The other five of those seven stocks include Alphabet (NASDAQ:GOOG), Amazon (NASDAQ:AMZN), Meta (NASDAQ:META), Microsoft (NASDAQ:MSFT), and Tesla (NASDAQ:TSLA). Still, even with all of the winners, there are still top tech stocks to avoid like the plague.

Tech Stocks to Avoid: Snap (SNAP)

Snap (NYSE:SNAP) rallied in 2023 with tech stocks showing resilience. However, they’ve also failed to sustain any sort of long-term rally as well. The reason is fairly straightforward in my opinion: The halo effect of surging markets can only lend so much credence to Snap as an investment. Sooner or later investors are bound to take a look at its fundamentals and leave. 

The social media firm’s revenues are down 7% and operating losses increased by 35%. The one arguable bright spot was improved net losses that narrowed by 9%. Yet, Snap still lost $329 million in the first quarter. Share prices have been very volatile in 2023. It’s impossible to predict where any stock is going with great accuracy and SNAP shares move so quickly that they can result in big losses. I think what’s kept it going higher at times is unwarranted optimism from bigger tech. That makes it a sell. 

Tech Stocks to Avoid: Coinbase (COIN)

Coinbase (NASDAQ:COIN) is a high-risk stock. First of all, the well-known crypto platform isn’t very far from being fully priced. In general, that’s a good sign to be wary since investors are bound to realize that analysts don’t see much upside sooner or later. 

But perhaps the more important reason to avoid Coinbase is that it is also trading near the same levels it traded a year ago. Today it trades for $64 and a year ago it traded for $66. The difference is Coinbase has shrunken significantly since then. In the first quarter of 2022 Coinbase tallied $1.164 billion in sales. A year later that figure had shrunken by nearly 37%. 

Cryptocurrency has staged something of a comeback in 2023. Investors are interested in leading assets like Bitcoin (BTC-USD) for a number of reasons. Slowing interest rate hikes and hedging against traditional financial system turmoil are important factors in that regard. But despite increased capital inflows into crypto Coinbase hasn’t benefited much. 

Tech Stocks to Avoid: Intel (INTC)

Intel (NASDAQ:INTC) was once one of the most revered chip makers on the market. Unfortunately, that no longer holds true – as it fails to deliver. 

That idea is particularly true now after Nvidia has exploded upward. And while it sets up a situation where investors are questioning if Intel could be the next big runner, I’d bet against that. The company is investing to beef up U.S. manufacturing with $20 billion heading toward Arizona manufacturing. While that may ultimately help Intel become the reshored American chip champion, the company is not strong now.  

Q1 was a disaster for the firm. Sales declined from above $18 billion to below $12 billion. An $8 billion gain became a $2.76 billion loss. And $2 in earnings per share became a $0.66 loss per share. Intel isn’t benefiting from the AI boom and investors should understand that doesn’t deserve to from some misunderstood halo effect. 

Aurora Innovation (AUR)

Aurora Innovation (NASDAQ:AUR) is an autonomous driving stock developing semi-truck and ride-hailing vehicles. It was a notable company in 2021 when the push for autonomous driving was at its height. Back then the company was linked to all kinds of positive news. Rumors of Apple car connections surfaced and its founding by a former Google self-driving project head only served to further validate it. 

But in 2023 there’s a lot less to be excited about. The company expects self-driving trucks to be on Texas roads in 2024. That’s a best-case scenario given by the CEO himself. It should be taken with a grain of salt. 

The company posted $0 in revenue in the first quarter. It lost $196 million. In addition, it also anticipates running out of funding sometime after 12 months. It may have to raise capital in that case. But who would be interested unless the company really turns itself around? That will require its tech to be flawless and clear regulatory hurdles. Those are both fraught with potential troubles. 

Agilysys (AGYS)

Agilysys (NASDAQ:AGYS) is a hospitality software stock that is severely overpriced. Granted, travel has returned as the pandemic ended and hospitality revenues strengthened with its return. However, investors have to ask themselves if it makes sense to believe Agilysys can continue to improve and if share prices are set to increase. 

I’d say the answer is no because Agilysys has a bottom 10% price relative to earnings. That P/E ratio of 158 at the time of writing isn’t particularly close to its all-time high of 250. But that was set back in 2010 when monetary policy was much looser. Investors could spend more freely then. Today they’re more likely to punish Agilysys for being overpriced relative to earnings. 

Mullen Automotive (MULN)

Mullen Automotive (NASDAQ:MULN) is on its way to zero. That makes it interesting and dangerous. Investors see the stock and expect volatility as it dies a slow death. They think that it will surge upward in its death throes. And they hope to capitalize on that. 

Surely some will. But many more will lose. The only way to avoid being the latter is to avoid Mullen Automotive completely. Given that Mullen Automotive has made zero sales to date that decision should be easy. The firm’s most recent 10-Q also gives no indication of when investors can reasonably expect revenues either. That should make it that much easier for investors who remain on the fence to avoid MULN shares. 

Investors are most likely interested in Mullen Automotive as a short-selling target anyway. Most serious investors realize the company is a going concern and likely to fail. But the problem there is that there have been multiple instances in which there are no shares available to short.

Lordstown Automotive (RIDE)

Lordstown Automotive (NASDAQ:RIDE) is a failed SPAC stock that reported less than $200,000 in 2022 sales, lost $102 million in making those sales which all came in Q4, and lost $282 million in the year overall. 

There’s not much hope in that earnings report save for the idea that the company at least made sales in Q4 after none at all during the previous three quarters. The company’s commercial Endurance trucks are barely selling. That’s partially attributable to perceptions about EVs and their utility as work vehicles undoubtedly. They’re also subjectively ugly trucks which doesn’t help. 

But beyond that, there’s also a bigger issue in the company which is dilution. Lordstown Automotive initiated a 1:15 reverse stock split on May 23. It isn’t having its intended effect: Share prices continue to trend lower. That’s usually what happens during reverse stock splits. They should increase prices as investors receive one share for multiple shares. But markets are wise to the trick and recognize it as a sign of desperation. That’s what’s happened here. 

On the date of publication, Alex Sirois 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.