20 Underperforming Stocks Targeted By Short Sellers

1. Kohl’s Corporation  (NYSE:KSS)

Short interest: 41.87%

6 months’ performance: -62.94%

Kohl’s Corporation is an omnichannel retailer in the United States. The company provides footwear, beauty products, apparel, accessories, and home products. It sells its products under the Apt. 9, Jumping Beans, Croft & Barrow, Sonoma Goods for Life, Tek Gear, and SO brand names. The stock is down 63.17% in the last 6 months, with a short interest of 41.87%.

The recent tariffs announcement has significantly raised the risk of a recession As a result, most analysts have become bearish on the stock due to projected demand contraction and high inventory levels.

As per the guidance, the management expects a 5% to 7% sales decline in FY 2025. To boost sales, the company would need to raise promotions, which is likely to pressure gross margins. However, this guidance was released before the tariff implementation announcement, so it does not include the potential tariff impacts. The company expects gross margin expansion of 30 to 50 bps, which is quite challenging considering the current state of the company and the economy.

While we acknowledge the potential of KSS as an investment, our conviction lies in the belief that some 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 KSS but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

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