Protecting Retirement Portfolios in the AI Era: Why These 3 High-Risk AI Stocks Should Be Avoided

The artificial intelligence (AI) boom has captivated investors, with many retirees tempted to allocate portions of their savings to high-growth tech stocks. However, for long-term retirement portfolios-where capital preservation and predictable income often outweigh speculative bets-certain AI companies pose untenable risks. SoundHound AI (SOUN), BigBear.ai (BIGB), and Pony.ai (PONY) exemplify the volatility and financial fragility that make them poor fits for retirement savings. Below, we dissect their vulnerabilities and explain why diversification into more stable assets is critical.

SoundHound AI: A Tale of Explosive Growth and Sustained Losses

SoundHound AI reported a record $42.7 million in revenue for Q2 2025, a 217% year-over-year surge. While this growth is impressive, the company's GAAP net loss of $74.7 million in the same period underscores a stark disconnect between revenue and profitability. Its Price-to-Sales (P/S) ratio of 30.9 reflects a market willing to pay a premium for future potential, but this valuation ignores the company's persistent cash burn and operational inefficiencies.

SoundHound's stock beta of 2.84-a measure of volatility relative to the S&P 500-signals extreme sensitivity to market swings. For retirees, this means a high likelihood of significant drawdowns during downturns, which could erode hard-earned savings. Additionally, the company's reliance on non-GAAP metrics to mask losses (e.g., a non-GAAP net loss of $11.9 million in Q2 2025) raises questions about transparency. With no clear path to profitability and a history of negative cash flow, SoundHound AI remains a speculative play ill-suited for conservative portfolios.

BigBear.ai: Declining Revenue and Strategic Uncertainty

BigBear.ai's Q3 2025 results revealed a 20% year-over-year revenue decline to $33.1 million, driven by reduced military program volume. Gross margin also contracted to 22.4%, down from 25.9% in the prior year. While the company's $456.6 million cash balance provides a buffer, its recent acquisition of Ask Sage-a $250 million generative AI platform-introduces execution risk. The acquisition's success hinges on integrating a new technology while navigating declining core revenue, a challenge that could strain resources.

BigBear.ai's Non-GAAP Adjusted EBITDA swung from a $0.9 million profit in Q3 2024 to a $9.4 million loss in Q3 2025. This volatility highlights operational instability, a red flag for retirees seeking predictable returns. Even with liquidity, the company's strategic pivot to AI is unproven, and its declining margins suggest pricing pressures or margin compression could persist. For long-term savers, the risks of overpaying for uncertain growth outweigh any potential upside.

Pony.ai: Revenue Growth Masking Deep Financial Stress

Pony.ai's Q3 2025 revenue rose 72% year-over-year to $25.4 million, driven by robotaxi services and licensing. However, this growth came with a $61.6 million net loss, reflecting heavy R&D and fleet expansion costs. The company's Price-to-Book (P/B) ratio of 8.5x-well above the industry average of 3.4x-suggests the market is overvaluing its future prospects. A discounted cash flow (DCF) model further complicates the picture, estimating a fair value of $55.66 per share, implying the stock trades 71.8% below intrinsic value. This discrepancy signals either market optimism or a flawed valuation model, both of which are dangerous for retirees.

Pony.ai's credit risk profile also reveals instability. Its probability of default (PD) fluctuated from 0.377 in November 2024 to 0.705 in early 2025, reflecting inconsistent financial health. For retirees, such volatility increases the risk of principal loss, particularly in a prolonged economic slowdown.

The Case for Diversification

Retirees must prioritize assets that generate consistent income and preserve capital. The three AI stocks above-despite their growth narratives-exhibit unsustainable losses, volatile valuations, and opaque operational risks. SoundHound AI's cash burn, BigBear.ai's declining revenue, and Pony.ai's stretched valuation all point to speculative profiles incompatible with retirement goals.

Diversification into dividend-paying equities, bonds, or low-volatility sectors like utilities or consumer staples offers a more reliable path to long-term security. As AI continues to evolve, retirees should avoid overexposure to high-risk tech plays and instead focus on building resilient portfolios that withstand market cycles.