We recently published a list of 7 Worst Vertical Farming and Hydroponic Stocks to Buy. In this article, we are going to take a look at where iPower Inc. (NASDAQ:IPW) stands against other worst vertical farming and hydroponic stocks to buy.
Vertical farming and hydroponics have proven to be revolutionary solutions in the agriculture sector, addressing food security, sustainability, and urbanization challenges. The global hydroponics market is expected to grow to $25.1 billion by 2027 from $12.1 billion in 2022, as per MarketsandMarkets. On the other hand, the vertical farming industry is forecasted to grow to $50.1 billion by 2032 from $6.92 billion in 2024, according to Fortune Business Insights. Hence, the sector has strong growth potential.
However, despite such positive forecasts, not all companies in the sector are poised for success. Several players are facing a downfall due to rising operational costs, scalability-related issues, and financial instability. These factors make some of the stocks in the sector riskier than others. One of the main factors affecting the industry is the high cost of setting up and maintaining vertical farms. High capital investment is required to support innovations like LED lighting, AI-driven automation, and climate-controlled systems. Although innovations like the CoolGrow VF LED light have enhanced energy efficiency by up to 38%, overall operational costs remain high. Moreover, farm input costs have climbed 44% since 2019, according to AHDB, with fertilizer, electricity, and machinery costs surging between 38% and 50%, decreasing profit margins. Such rising costs put pressure on companies to maintain profitability, especially where the industry struggles with tight margins.
Similarly, dependence on artificial lighting and climate control results in high energy consumption, increasing costs, and reducing profitability. Although technological advancements are being made to decrease costs, energy-intensive operations hit profit margins. Additionally, supply chain disruptions, especially after the COVID-19 pandemic, have added further complications. Labor-related shortages and transportation issues have put pressure on companies, making it difficult to scale operations efficiently. Many vertical farms rely on highly specialized components, and delays in sourcing critical equipment halt expansion efforts.
Furthermore, the hydroponics sector has also been facing regulatory uncertainty. Although cannabis legalization in several markets initially increased demand for hydroponic systems, inconsistent regulations and oversupply in the cannabis market have stunted growth. Many companies in the sector that heavily rely on cannabis cultivation have faced difficulties in pivoting to other revenue streams. On the other hand, although demand for vertical farming produce is increasing, it faces challenges due to higher price points compared to traditional agriculture. While sustainability is an attractive selling point, budget-sensitive consumers tend to go for cheaper options, resulting in a decrease in the market reach of vertically farmed produce.
Investor sentiment is shifting, with increasing doubts regarding capital-intensive agritech ventures. According to McKinsey & Company, annual investments worldwide in food and agribusiness have surpassed the $100 billion mark. However, hydroponic and vertical farming companies are still finding it difficult to secure funding. This has resulted in increased short interest in several underperforming stocks, with hedge funds betting against companies that do not demonstrate sustainable long-term business models. Companies that previously ensured high-margin growth have faced a decrease in revenue, adding to concerns regarding long-term viability.
Ultimately, the structural challenges of the industry, as well as economic pressures, have led to significant stock underperformance for multiple vertical farming and hydroponic companies.
Methodology
To come up with our list of the 7 Worst Vertical Farming and Hydroponic Stocks to Buy, we started by making use of Finviz screener to identify stocks from the agricultural inputs and farm products industries. We also looked into our previous articles on the sector to make sure relevant companies with substantial market capitalization are included.
Next, we looked into hedge fund interest in these companies, as we believe that stocks with significant institutional backing point toward financial stability. However, we focused on short interest, measured by the short percentage of float, reflecting investor skepticism and potential risks. A higher short interest points toward a company’s frail financial position, operational inefficiencies, or larger industry challenges. The companies were then ranked in ascending order based on their short percentage of float, with the most shorted stocks situated at the top of our list.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
iPower Inc. (NASDAQ:IPW)
Short % of Float: 2.01%
Number of Hedge Fund Holders: 2
iPower Inc. (NASDAQ:IPW) provides e-commerce and supply chain solutions and was initially known for hydroponics and vertical farming equipment. The company has expanded its operations through the integration of technology-driven solutions, such as the SuperSweet platform, which enhances supply chain management and merchandising for its partners.
For Q2 2025, iPower Inc. (NASDAQ:IPW) posted a revenue of $19.1 million, a 14% year-over-year increase, primarily driven by SuperSweet and higher product sales. Its gross profit increased by 15% to $8.4 million, while gross margins improved by 44% due to enhanced supplier negotiations. The company managed a net income of $0.2 million, a significant improvement over its net loss of $1.9 million in the previous year. On the other hand, its cash reserves declined to $2.9 million from $7.4 million as of June 30, 2024. This raised liquidity concerns, although iPower Inc. (NASDAQ:IPW) was able to reduce its debt by 31% to $4.4 million.
To strengthen its position, the company is expanding its supplier network to optimize costs and manage supply chain risks. The company recently expanded its manufacturing base to Vietnam, aiming to lower production and logistics costs and improve responsiveness to demand fluctuations. Moreover, SuperSweet continues to perform well, adding 20% to total sales last quarter. It is expected to scale further through AI-driven predictive analysis, improving supplier interactions and merchandising strategies.
Although iPower Inc. (NASDAQ:IPW) is implementing strategic measures to boost operational efficiency, declining cash reserves and dependence on external platforms raise concerns about its long-term potential. The company’s share price dropped by 44.12% year-to-date, adding to concerns over its financial position. Hence, it ranks as one of the worst agriculture stocks.
Overall, IPW ranks 7th on our list of worst vertical farming and hydroponic stocks to buy. While we acknowledge the potential of IPW, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than IPW but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
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