Who's The Next Fitbit?

Things initially looked up for Fitbit Inc (NYSE: FIT), which had its initial public offering earlier this month. The stock soared, rising 52 percent in its debut.

Global Equities Research analyst Trip Chowdhry wasn't impressed. In a note to investors, he warned them to "take profits on FIT, as it is a declining asset business." Fitbit closed down 4.94 percent on Wednesday.

Chowdhry said that Fitbit will become the next Box Inc (NYSE: BOX), Alibaba Group Holding Ltd (NYSE: BABA) or GoPro Inc (NASDAQ: GPRO).

This begs the question: what is the next Fitbit?

"I would say Pinterest, Snapchat, Uber [and] Airbnb," said Chowdhry. "These companies are getting rich valuations in the illiquid private markets. And somehow the investors believe that the public markets will continue to remain foolish and the public market will continue to bail out the investors who have invested in the private market."

Chowdhry said that bubbles are definitely out there, but there's a difference between what investors encountered in 1999 and 2008 and the bubbles of today.

"In 1999, [the] bubble was a global phenomenon -- it happened across all the technologies across the world," said Chowdhry. "In 2008, the bubble was in real estate but it was across the whole world. This time the bubbles are created and popped so the impact is not global, it is not industry-specific, it is only limited to that specific company."

Related Link: Snapchat's Monetization Deal With Amazon Could Boost IPO

No More Fools

Venture capitalists may continue to over-inflate startups before their IPOs, but Chowdhry isn't convinced that investors will keep buying into these firms after their public debut.

"There's not much upside left," he said. "[Remember when investors said] 3D is going to change everything that we do in the world? 'Your heart will be made with 3D printers.' Remember that?"

3D Systems Corporation (NYSE: DDD) and ExOne Co (NASDAQ: XONE) are among the 3D printing companies that have taken a beating this year.

Regarding GoPro, Chowdhry does not believe it can easily transform into a successful drone producer. As a drone company, GoPro would have to deal with a multitude of regulations and update its product every week to deal with some of those regulations, including no-fly zones.

"That's not in GoPro's business," he said. "It's about creating cameras."

When The Bubble Bursts…

"Fitbit will get popped," Chowdhry concluded. "BABA got popped. And Snapchat -- two days after the IPO, they'll get popped."

Chowdhry urged investors to be prudent.

Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.