Why Sell Your AI Losers Before December 31?
Follow the whole story: every piece in this series is on our AI storyline page.
The AI selloff has left a lot of investors with red numbers next to names they still believe in. We’ve been following what’s happening with AI stocks since the chip makers started falling in October. If you’re sitting on one of those losses in a taxable account, there’s a move with a deadline: sell before December 31, take the tax loss, and buy a similar stock the same day so you stay in the trade. There’s a bigger question under it, too: if you wouldn’t buy this stock today, why are you still holding it? We’ll come back to that at the end.
“Sell when the business changes, not when the price does.” – Anonymous
Which AI Stocks Are Showing The Biggest Losses?
Here are some of the AI and AI-power names with the deepest 12-month losses, Trefis daily matrix, Nov 9 close:
| Stock | Mon close | 12 months | Below 52-wk high |
|---|---|---|---|
| CoreWeave | $48.98 | −53.6% | −64.5% |
| Oracle | $119.79 | −49.6% | −51.4% |
| Applied Digital | $16.72 | −46.8% | −66.3% |
| NRG Energy | $97.40 | −40.7% | −46.5% |
| Vistra | $133.92 | −28.5% | −28.5% |
| Constellation | $276.09 | −23.1% | −26.8% |
| Tesla | $378.05 | −15.1% | −22.8% |
| Broadcom | $319.48 | −10.2% | −33.4% |
The biggest losses aren’t in the chip makers. They’re in the companies that rent out AI computing and sell it power.
Losses outside AI count the same way. Netflix, for one, is down 42.9% over 12 months.
Can You Have A Loss In A Stock That’s Up This Year?
Yes, and many people do. The 12-month return is the stock’s number. Your number depends on what you paid. Anyone who bought near the highs has a loss even in names that are up for the year:
| Stock | 12 months | If bought at the high |
|---|---|---|
| Applied Materials | +58.5% | −48.7% (Jun 2026 high) |
| Micron | +189.8% | −39.6% (52-wk high) |
| Nebius | +28.6% | −50.7% (Jun 2026 high) |
| CoreWeave | −53.6% | −73.3% (Jun 2025 high) |
| Oracle | −49.6% | −63.0% (Sep 2025 high) |
Harvest by tax lot, not by headline. Check what you paid for each purchase.
How Does Tax-Loss Harvesting Work?
The rules for taxable accounts (not IRAs or 401(k)s), as the IRS lays them out in Publication 550 and Topic 409:
Losses offset gains first, with no limit. A loss you realize this year cancels out gains you realized this year, dollar for dollar.
Then up to $3,000 of ordinary income. If losses are bigger than gains, up to $3,000 of the rest ($1,500 if married filing separately) reduces your other income.
The rest carries forward. Unused losses roll into future years, with no expiry, to offset future gains and another $3,000 a year of income.
The wash-sale rule. If you buy the same or a “substantially identical” security within 30 days before or after the sale, the loss is disallowed for now. It isn’t gone; it’s added to the cost of the new shares. Purchases by your spouse, in your IRA (where the loss is gone for good), and automatic dividend reinvestments can all trigger it.
That last rule is the one that bites this year. If you bought more Oracle or Vistra on the October dip, selling your older, losing shares now can be a wash sale, because you bought within the 30 days before the sale.
How Do You Stay In The Trade?
You sell the losing stock and buy something that keeps a similar bet but isn’t the same security. Shares of one company generally aren’t “substantially identical” to another company’s, even in the same industry. Some pairs from the names above, as ideas, not recommendations:
| Sell | Swap idea | What stays, what changes |
|---|---|---|
| Vistra | Constellation or NRG | Same power-for-AI bet, different plants |
| Oracle | Microsoft | AI cloud, much bigger and broader |
| CoreWeave | A few cloud giants, or an AI fund | AI demand, less single-name risk |
| Broadcom | Nvidia or a chip ETF | AI chips, different customers |
| Tesla | A Nasdaq-100 fund | Still owns Tesla, plus 99 others |
The swap keeps the theme. It doesn’t keep the exact risk, so check that the new stock is one you’d want to own.
For context, over the same 12 months Microsoft is up 8.6%, Nvidia is down 10.0% and Constellation is down 23.1% (Trefis daily matrix). A swap changes what you own; if it’s a bigger slice of one theme than you realized, the tally in How Much AI Do You Really Own? is worth a look first. Whether a fund that holds the stock you sold counts as substantially identical isn’t settled in the rules; ask a tax adviser before you rely on it.
What Does It Look Like In Dollars?
An illustrative example in round numbers (not anyone’s real return):
| Step | Amount |
|---|---|
| Paid for a power stock | $100,000 |
| Worth today (−28%, like Vistra) | $72,000 |
| Loss realized on sale | $28,000 |
| Offsets gains taken this year | $20,000 |
| Offsets ordinary income | $3,000 |
| Carried to 2027 | $5,000 |
Same $72,000 still invested in power, and $23,000 of this year’s income shielded.
At an illustrative 15% long-term gains rate and 24% income rate, that’s about $3,000 + $720 = $3,720 less tax this year, with $5,000 still in the bank for future years. Short-term gains are taxed at income rates, so the saving is bigger if the losses offset those.
Two honest caveats. First, the new shares start at the lower $72,000 cost, so if they rise you’ll owe more tax when you eventually sell: harvesting mostly delays tax rather than erasing it. Second, the clock for long-term treatment starts over on the new shares.
Where those $20,000 of gains come from matters, too. This year’s AI winners are huge: Micron is up 189.8% over 12 months and AMD 108.5%. If those have grown too big in your portfolio, a harvested loss lets you trim them with little or no tax. That’s rebalancing paid for by the selloff.
When Is The Deadline, And When Can You Buy Back?
The sale has to happen by the last trading day of the year, Thursday December 31, by trade date. If you want the original stock back, wait 31 days:
| Sell on | Buy back on or after |
|---|---|
| Tue Nov 10 | Fri Dec 11 |
| Fri Nov 20 | Mon Dec 21 |
| Tue Dec 1 | Mon Jan 4, 2027 |
| Thu Dec 31 | Mon Feb 1, 2027 |
And don’t buy the same stock in the 30 days before you sell, either.
What’s The Bigger Idea?
Tax-loss harvesting is the one sale that isn’t about the price or the business. It’s about the tax bill. That makes it a useful test. When you list your losers, sort them into two piles. Pile one: the business is the same, the price fell. Harvest, swap, stay in the trade. Pile two: the business has changed, the reason you bought is gone. Sell, take the loss, and don’t swap back in. A falling price tells you how other people feel; a changed thesis tells you about the company. Year end is a good deadline for asking which is which.
And look past December. A loss carried forward is an asset for 2027 and beyond: every future gain it absorbs, up to its size, comes tax-free. The investors who come out of a selloff ahead often aren’t the ones who called the bottom. They’re the ones who used it to clean up their portfolio.
What Can You Do This Week?
1. List your lots. Every position with a loss, by purchase date and price, including dip buys from the last 30 days.
2. Sort by thesis. Business intact: harvest and swap. Business changed: sell and move on.
3. Mark the dates. Sale date, the 31-day buy-back date, and turn off dividend reinvestment on anything you sell.
What it replaces: holding a loser all year because selling “makes the loss real,” then selling it in a panic later with no tax plan. The loss is already real; harvesting just puts it to work. This is educational, not tax advice: talk to a tax advisor or a Trefis partner advisor before you trade.
What to watch: Tuesday’s inflation report and the Fed’s December 9 decision could move these stocks again before year end. A lower price before you sell means a bigger loss to harvest; a bounce means a smaller one.
In a taxable account, you can book an AI-stock loss this year and stay in the trade. Sell by December 31, buy a similar but different stock the same day, and avoid buying the original within 30 days before or after (IRS Publication 550). Losses offset gains, then $3,000 of income, and the rest carries forward. Harvest where the business is intact; where it isn’t, just sell.
What Should You Ask Next?
- Holding the biggest loser in the table? Buy, Sell Or Hold CoreWeave Stock At $49?
- Down on Netflix too? Netflix Stock At $64: Better Than Disney?
- How much AI do you really own once you count your index funds? See How Much AI Do You Really Own?
Follow this story with us: we’ll update the loss table each week until December 31.
Is Your Year-End Plan Ready?
Seven weeks is enough time to turn this year’s losses into a plan. If you have $1 million or more invested, get a second opinion from a Trefis expert partner advisor in a free 15-minute call, or let Invest With Trefis run the plan for you.
For questions about this article or underlying research, email help@trefis.com.