In this article, we will look at the 8 worst performing tech stocks in 2024.
The Tech Sector’s Resilience Amid Economic Challenges
One of the most popular sectors of the stock market is technology. The sector boasts an impressive track record of explosive returns and the possibility of even greater returns. Likewise, the industry has lived up to expectations in 2024, going by the Nasdaq 100, rallying 21% year to date.
The impressive rally in the tech sector comes against the backdrop of investors shunning high interest rates and inflation to bet on stocks well poised to benefit from the next industrial revolution. With artificial intelligence in the early stages of development, tech stocks with exposure to the burgeoning sector have exploded, with some becoming trillion-dollar empires.
READ ALSO: 10 Most Promising Future Stocks According to Analysts and 10 Most Promising Growth Stocks According to Hedge Funds.
In a note to investors, analysts at Mizuho have already noted that generative AI “is igniting growth and disruption across multiple markets, pushing the frontiers of innovation and productivity.” That’s because AI servers are supporting the development of infrastructure that powers the AI revolution.
The rally in the technology sector has persisted even with economists and analysts questioning the global economy’s health. China’s economy is slowing down to the extent that the government, injecting some stimulus and reforms, has done little to rattle investor’s sentiments on tech stocks.
According to Ray Dalio, the founder of Bridgewater Associates, China must carry out a “beautiful deleveraging” in addition to its recent stimulus measures and reforms to avoid serious debt issues.
“I think the changes that are taking place are terrific changes, but you still have to do the debt restructuring. You need to do it correctly, and that’s as part of a restructuring. That becomes the challenging part of it. I think that will be the test,” Dalio said.
The Impact of High Interest Rates and Inflation on Tech Stocks
Likewise, the US economy has shown signs of lethargy, depicted by a slowdown in the labor and manufacturing sectors. The US Federal Reserve conducted a 50 basis point rate cut to engineer a soft landing and avert recessions, underlining that all may not be well in the world’s largest economy.
Similarly, the International Monetary Fund Managing Director Kristalina Georgieva has warned that high debt and low growth pose significant risks to the global economy, which could hit the equity markets.
While notable progress has been made in supporting the global economic recovery, the IMF chief believes there are challenges in servicing debt that could pose a significant danger to the worldwide economy.
“It’s not yet time to celebrate,” she told Karen Tso. “When we look into the challenges ahead of us, the biggest one is low growth, high debt. This is where we can and must do better,” she added.
Nevertheless, investors have continued to shrug off all these concerns, buoyed by impressive and record-breaking earnings and revenue growth in some of the biggest tech companies. Soaring geopolitical tensions in the Middle East and the uncertainty triggered by the upcoming US election have done little to sway investors’ sentiments about tech stocks.
Nevertheless, mega-cap technology stocks have started to deflate after a dazzling run. Fresh concerns about the state of the economy accompanied the most recent downturn. The valuations of formerly high-flying stocks and the market as a whole continue to be the larger challenge, though, as most economists believe there is little chance of a recession and that rate cuts from the Federal Reserve are imminent.
This is a rotation under the hood, which means that investors are moving from recent winners to names that have been underperforming. In this instance, growth stocks have generally given way to value stocks.
Likewise, amid the resilience of the broader tech sector, not all companies have delivered record-breaking results and generated significant returns for investors. As a matter of fact, some stocks have underperformed in the broader industry, shedding more than 50% in market value.
With that, let’s look at the 8 Worst Performing Tech Stocks in 2024.
Source: Pexels
Our Methodology
To compile our list of the worst-performing technology stocks in 2024, we ranked all technology firms based on their year-to-date performance and selected the top 15 with the largest year-to-date losses. Finally, we ranked the stocks in descending order based on their year-to-date losses.
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8 Worst Performing Tech Stocks in 2024
8. DoubleVerify (NYSE:DV)
Year to Date Gain: -50.20%
Number of Hedge Fund Holders: 20
DoubleVerify Holdings, Inc. (NYSE:DV) is a technology company that offers a software platform for digital media measurement and data analytics. Advertisers mostly use its solutions to increase the effectiveness and quality of advertising investments.
The stock has shed more than 50.20% in market value as investors question its growth metrics in the aftermath of the company providing a weaker-than-expected sales forecast for the year. Last year, management projected that revenue would grow by 22% but cut its forecast to 17% in the first quarter, all but sending jitters in the investment community.
DoubleVerify Holdings, Inc. (NYSE:DV) was forced to cut its full-year revenue guidance in response to customers pulling back on spending on its platform, consequently affecting its revenue stream. The high inflation and interest rates have taken a significant toll on the company’s customer base. Over the years, the company has been delivering revenue growth of upwards of 20%. However, not anymore amid a reduction in advertising spend
For its second quarter, the advertising company posted mixed financial results. While revenues were up 17% year over year, net income fell to $7.5 million, down from $12.8 million in the same period last year.
According to Insider Monkey’s database, 24 hedge fund portfolios held DoubleVerify Holdings, Inc. (NYSE:DV) at the end of the first quarter, down from 27 in the previous quarter.
The London Company Small Cap Strategy stated the following regarding DoubleVerify Holdings, Inc. (NYSE:DV) in its Q2 2024 investor letter:
“Initiated: DoubleVerify Holdings, Inc. (NYSE:DV) – DV develops software platforms for digital media measurement, data, and analytics. DV sells a critical insurance-like product known as “ad verification,” designed to create transparency, eliminate fraud, and drive ad-spending optimization. Ad verification has reached a point of mass acceptance among digital ad buyers due to its measurable low cost/high reward value proposition. DV operates in a duopoly where it commands the leading market position (>50% market share), by focusing on product innovation rather than sales expansion. DV’s business should continue to benefit from secular tailwinds in digital advertising. Incremental revenue growth should be accretive to returns on capital, given the its high cash margins and minimal capex needs. We initiated our position following a pullback, allowing us to purchase an advantaged company growing at a double- digit rate, with high margins, at a market multiple.”
7. WEBTOON Entertainment Inc. (NASDAQ:WBTN)
Year to Date Gain: -50.91%
Number of Hedge Fund Holders: 23
WEBTOON Entertainment Inc. (NASDAQ:WBTN) is a technology company that operates a storytelling platform that allows creators and users to discover, create, and share new content. The company has lost more than 50% in market value since it went public mid-this year.
The online comic’s platform, backed by a South Korean search engine, has taken a significant hit in the market by delivering mixed financial results that have raised concerns about its growth prospects. In the second quarter, WEBTOON Entertainment Inc. (NASDAQ:WBTN) delivered revenues of $321 million, slightly improving from the $320.7 million delivered in the same quarter last year. It was a significant miss, considering that the market expected the company to post revenues of $340.8 million.
Amid the disappointing financial results, the company remains in a solid position for growth, given its position in the webcomics market. Additionally, the company’s core business revolves around paid content and advertising that should receive a significant boost as macroeconomics improves on lower interest rates.
A key competitive edge of WEBTOON Entertainment Inc. (NASDAQ:WBTN)’s business strategy is its investment in content creation and the platform’s ability to attract a wide range of creators. With its various formats, the company hopes to keep users interested while generating income from advertising and subscription models.
6. Concentrix Corporation (NASDAQ:CNXC)
Year to Date Gain: -52.02%
Number of Hedge Fund Holders: 25
Concentrix Corporation (NASDAQ:CNXC) provides technology-infused customer experience (CX) solutions globally. Their services include CX process optimization, technology innovation, automation, analytics, and business transformation. They operate across various communication channels like voice, chat, email, social media, and custom applications.
Concentrix Corporation (NASDAQ:CNXC) is one of the worst-performing tech stocks in 2024, having lost 52% in market value year to date. While providing technology-infused customer experience solutions, it has been under pressure on providing weaker-than-expected guidance for the fourth quarter and full year.
The technology and services company expects fourth-quarter earnings per share to range between $2.90 and $3.16, below analysts’ estimates of $3.48 a share. Likewise, it expects full-year earnings to range between $11.05 and $11.31, below analysts’ expectations of $11.71 a share. The decline underscores the challenges that Concentrix is facing, mainly due to clients’ commitments and offshoring strategies.
Concentrix Corporation (NASDAQ:CNXC) faces a challenging market environment characterized by stiff competition in providing customer experience solutions. Nevertheless, its revenue in the third quarter has shown signs of resilience, having increased 2.6% to $2.4 billion. The increase was driven by growth in the retail travel and e-commerce sectors.
Similarly, it is positioning itself to access higher-margin projects and provide better value to its clients and shareholders due to its focus on technology, AI integration, and transformative business opportunities. Future growth should be fueled by its strategic direction and the possibility of automation and consolidation.
As of Q2 2024 end, 25 out of the 912 hedge funds profiled by Insider Monkey had bought and owned Concentrix Corporation (NASDAQ:CNXC)’s shares. Lauren Taylor Wolfe’s Impactive Capital was the biggest shareholder due to its $243.40 million stake.
Here is what Investment management company First Pacific Advisors said about Concentrix Corporation (NASDAQ:CNXC) in its first quarter 2024 investor letter:
“Concentrix Corporation (NASDAQ:CNXC) is one of two top customer experience (CX) vendors globally. The company started managing call centers but has since evolved into a high-tech business process outsourcer (BPO) that also designs and manages customer-facing websites and apps, integrates the data, and optimizes a client’s customer interactions. The company was spun out from TD Synnex, another of the Fund’s core holdings, and we have always been impressed with the company’s innovation and growth. CX is a relatively new business model, and Concentrix has been rolling up smaller competitors. In March, 2023 they bought WebHelp, a leading European CX player, for $4.8B in cash and stock. We believe the WebHelp acquisition will help consolidate an industry where Concentrix and Teleperformance are the largest players. On Jan. 24, 2024 Concentrix reported Fiscal 2023 earnings that included weak 1% – 3% organic growth guidance for 2024. The market’s current concern about the potential of artificial intelligence to disrupt Concentrix’ core call center business has resulted in the underperformance in the shares across the industry. Concentrix has three turns of debt from the Webhelp deal which will be a problem if earnings deteriorate quickly. But Concentrix now trades at less than five times adjusted EPS. We think, but don’t know, that Concentrix’ domain knowledge and integration into customers’ workflows make for meaningful switching costs. We have held on to our Concentrix shares but have not added to the position.”
5. Intel Corp. (NASDAQ:INTC)
Year to Date Gain: -52.99%
Number of Hedge Fund Holders: 75
Intel Corporation (NASDAQ:INTC) was one company that was expected to be at the center of the artificial intelligence. However, that has not been the case, as the stock has lost 52.99% in market value, affirming its status as one of the worst-performing tech stocks in 2024.
The selloff comes from investors reacting to the company’s struggles in the foundry business. The business faces many uncertainties, especially with the company announcing a restructuring that includes lying off 15% of the workforce.
Intel Corporation (NASDAQ:INTC) has also been under pressure for failing to leverage its dominance in the PC and server markets. Its failure to develop a long-lasting lineup of mobile chips has seen its market share dwindle significantly amid stiff competition from Arm Holdings, stifling its growth prospects and sentiments.
Likewise, the company failed to spot the opportunity to develop discrete graphic processing units to support artificial intelligence applications. In contrast, Nvidia spotted the opportunity and ran away to become a trillion-dollar empire.
Nevertheless, Intel Corporation (NASDAQ:INTC) scored a significant win that appears to have paused the considerable pressure it’s been facing year to date. Amazon chose it to develop a custom artificial intelligence (AI) fabric chip, which was interpreted as a big win in the market.
Additionally, Intel Corporation (NASDAQ:INTC) did ink a strategic deal with AMD to form an advisory group on the x86 Central Processing unit architecture. The deal is quite significant as it should strengthen the company’s prospects in the intelligent pine CPU market that ARM Holdings currently dominates.
Intel Corporation (NASDAQ:INTC) was a part of 75 hedge fund portfolios at the end of Q2 2024, compared with 77 in the previous quarter, as per Insider Monkey’s database. The stakes owned by these hedge funds have a total of nearly $2 billion.
Columbia Threadneedle Global Technology Growth Strategy stated the following regarding Intel Corporation (NASDAQ:INTC) in its Q2 2024 investor letter:
“Intel Corporation (NASDAQ:INTC) stumbled, and shares retreated as the company continued to struggle to right the ship as part of its shift in strategy. The company reported a weak quarter, with most results coming in below expectations, especially margins. The company did outline accelerating revenue growth in the second half of the year based off stable PC demand, the ramp up of its AI product and the recovery of end markets off of cyclical lows.”
4. Fastly Inc. (NYSE:FSLY)
Year to Date Gain: -58.83%
Number of Hedge Fund Holders: 23
Fastly, Inc. (NYSE:FSLY) is a technology company that provides an edge cloud platform for processing, serving, and securing applications. Its edge cloud offers a way for developers to build a secure and deliver digital experience. Amid the digital revolution fueled by artificial intelligence, it is becoming one of the worst-performing tech stocks in 2024.
The stock is down by about 58.83% as investors react to the company’s failure to grow in a booming industry. While the edge computing market is expected to increase by 37% through 2030, stiff competition, especially from Cloudflare, has posed a significant danger to the company’s long-term prospects.
Since Cloudflare is twice as big as Fastly, Inc. (NYSE:FSLY), it has many new customers. While Fastly has delivered revenue growth in recent quarters, its growth rates have been much lower and have come at significant costs that have significantly affected its profit margins.
With the company projecting revenue growth of 15% for 2024, below the 17% growth recorded in 2023, the stock would always come under pressure as investors questioned its growth prospects. Revenue in the second quarter beat analysts’ estimates after increasing 8% to $132.4 million.
Nevertheless, Fastly, Inc. (NYSE:FSLY) struggled with higher costs, resulting in a net loss of $43.7 million, four times more than a net loss of $10.7 million delivered in the same quarter last year. The significant net loss and demand challenges for the company’s solutions have been the catalyst behind the stock being pounded in the market.
Amid the growth concerns, the company has embarked on a cost reduction process as it looks to bolster its profit margins. It has also reiterated its commitment to enhancing its edge cloud solutions and focusing on robust security solutions. Fastly, Inc. (NYSE:FSLY) had 23 hedge funds long its stock in the second quarter, with a total stake value of $32.97 million.
3. Viasat, Inc. (NASDAQ:VSAT)
Year to Date Gain: -60.56%%
Number of Hedge Fund Holders: 17
Viasat, Inc. (NASDAQ:VSAT) is a space satellite communications company that offers broadband and communications products and services. It provides in-flight connectivity and wireless in-flight entertainment services for commercial aircraft and private jets.
It has emerged as one of the worst-performing tech stocks in 2024, having lost 60.56% in market value over the past year. The implosion started last year after the stock tanked on reports of a glitch in one of the company’s new satellites. The company admitting the issue and explaining potential mitigation rattled the markets.
Viasat, Inc. (NASDAQ:VSAT)’s sentiments also took another hit after it emerged that United Airlines will no longer leverage its In-Flight Connectivity (IFC) in its planes, opting to shift to Elon Musk-backed Starlink. The shift translates to a significant loss of a key revenue stream that did not go well with investors.
Despite the aforementioned difficulties, Viasat, Inc. (NASDAQ:VSAT) has demonstrated robust revenue growth, as evidenced by its 67.71% increase in the previous 12 months as of fiscal Q1 2025. Nevertheless, profitability is still an issue, though. Over the past 12 months, the company has not turned a profit. The operating income for the same period was negative, coming in at -$667.25 million.
The company has moved to strengthen its long-term prospects through strategic alliances with telecom firms, which allow it to expand into new markets and gain more clients. Furthermore, it is also investing in innovation and has made significant investments in R&D to enhance its satellite technology, strengthening its position as a leader in satellite communications while improving service quality and increasing capacity. It is also pursuing international expansion in Europe and Asia as it seeks to diversify its clientele and create new revenue streams.
Investor sentiment was negative toward Viasat, Inc. (NASDAQ:VSAT) in Q2 as the stock was part of 17 hedge funds’ portfolios, compared to 21 hedge funds in the first quarter of 2024. FPR Partners is the top investor in the company and has a position worth $19.35 million as of the second quarter.
Cove Street Capital stated the following regarding Viasat, Inc. (NASDAQ:VSAT) in its first quarter 2024 investor letter:
“Regarding Viasat, Inc. (NASDAQ:VSAT), we do not have much to say here other than up quarter/down quarter performance prevails as the company awaits the launch of its next satellite of capacity. The company continues to be an outstandingly cheap stock with multiple catalysts.”
2. Five9, Inc. (NASDAQ:FIVN)
Year to Date Gain: -60.09%
Number of Hedge Fund Holders: 34
Five9, Inc. (NASDAQ:FIVN) has carved a niche as a provider of intelligent cloud software for contact centers. It offers a virtual contact center cloud platform that delivers applications that support customer service sales and marketing solutions.
The company has been facing stiff competition in cloud solutions, resulting in the stock sentiments taking a hit and tanking 60% year to date. The selloff has seen the company emerge as one of the worst-performing tech stocks in 2024.
The stock has been under pressure in the market on the company, facing a series of setbacks, including a reduction in revenue guidance that has triggered concerns about underlying growth. The company has also been forced to carry out a series of layoffs to strengthen its profit margins as it faces competitive pressures.
In 2024, investment firm Anson Funds Management amassed a significant stake in the call center software company and began an activist campaign. The investment firm is urging the company to consider a potential sale of the entire business as one of the ways of unlocking hidden value after years of underperformance.
The sales push came after Five9, Inc. (NASDAQ:FIVN) pushed back on a deal to be acquired by Zoom Video Communications, the maker of virtual meeting software. Nevertheless, it has since acquired Acqueon, a firm specializing in proactive outbound Omni channel customer engagement, and it is looking to expand its artificial intelligence offerings to bolster its growth metrics.
The push to acquire Acqueon also aligns with Five9’s plans to manage its expenses and improve profitability as it expands its footprint in India to pursue new growth opportunities and improve gross margins.
By the end of the second quarter of 2024, the number of hedge funds with positions in Five9, Inc. (NASDAQ:FIVN) had decreased to 34, down from 38 in the previous quarter. Among these hedge funds, Alyeska Investment Group emerged as the largest shareholder, holding a significant position valued at $94.22 million.
In its Q2 2023 investor letter, Brown Capital Management Mid Company Fund provided the following insight regarding Five9, Inc. (NASDAQ:FIVN):
“Five9, Inc. (NASDAQ:FIVN) is a leader in cloud-based contact-center software, which serves as the routing engine to connect callers to agents. With the growth of e-commerce, consumers are making fewer in-person visits to stores but contacting companies more frequently, driving the need for world-class contact-center software solutions like Five9’s. It has been a tough couple of years for Five9’s stock and this quarter provided no relief. Competitive concerns, questions about AI’s long-term impact on the business and deteriorating macroeconomic conditions have all cast clouds over the company’s stock. Five9’s consumer segment, one of its largest divisions, has really struggled of late as clients hire fewer call-center agents, pressuring Five9’s seat-based revenue model. Total revenue growth decelerated to 13% year-over-year in the most recent quarter, down from 28% and 17% in 2022 and 2023, respectively. Moreover, management guided to 16% for the full year 2024, which some consider optimistic given the weak start to the year. These worsening sales trends further weighed on shares during the quarter.
Looking through the current industry doldrums, we see a bright future for Five9. The company inked its largest deal ever during the quarter, which will generate more than $50 million in annual revenue once fully rolled out. We believe this is an important signal of Five9’s long-term potential. The company is attacking a $60 billion market opportunity, is winning new business at industry-leading rates and is gaining share from legacy incumbents stuck with antiquated technology. We continue to assess the potential threat of AI, but so far it has provided an uplift to company results. The company’s AI product is very popular with large enterprises as it assists agents with customer interactions and can sometimes be used to fully automate interactions. Far from shrinking the number of industry seats, as some fear, management said revenue per seat doubles when customers adopt their AI applications. We expect sales growth to pick up markedly in the coming years, which should result in much stronger stock performance.”
1. Wolfspeed, Inc. (NYSE:WOLF)
Year to Date Gain: -63.23%
Number of Hedge Fund Holders: 29
Wolfspeed, Inc. (NYSE:WOLF) has been a big disappointment, underperforming the overall market despite operating in the semiconductor sector, which has been up over the past two years amid the artificial intelligence frenzy. While the stock is down by about 63.23% for the year, it is also down by about 90% from its 2021 peak, cementing its status as one of the worst-performing tech stocks in 2024.
Wolfspeed, Inc. (NYSE:WOLF) has been investing significant money to develop into a vertically integrated silicon carbide (SiC) chip manufacturer. Despite touting its Sic capabilities and design-in victories, Wolfspeed has been sluggish in demonstrating tangible returns on all its investments. Other rivals have already been increasing their SIC revenues and profits.
The company has not generated significant returns despite investing a lot. Its operating loss for the most recent quarter was $145.9 million, and revenue was essentially flat. Additionally, management has only projected flat revenue and even greater losses for the current quarter. At the same time, the company has roughly $2 billion in cash and $6 billion in debt.
Nevertheless, analysts are optimistic about Wolfspeed, Inc. (NYSE:WOLF) ‘s long-term prospects once its 200mm wafer plant comes online. The plant is expected to draw in top silicon carbide (SiC) clients because chips made on the larger 200mm wafer are less expensive than those made on the 150mm wafers, which are currently used to produce the majority of SiC chips. According to one of the Roth analysts, some electric vehicle (EV) negotiations with SiC customers might end, which would be a significant boost and a confirmation of Wolfspeed’s technology.
According to Insider Monkey’s database, the number of hedge fund portfolios holding Wolfspeed, Inc. (NYSE:WOLF) decreased from 33 in the previous quarter to 29 by the end of the second quarter. This indicates a reduction in interest or confidence among hedge funds in Wolfspeed, Inc. during this period.
Here is what ClearBridge Growth Strategy said about Wolfspeed, Inc. (NYSE:WOLF) in its Q3 2024 investor letter:
“We exited long-time holding Wolfspeed, Inc. (NYSE:WOLF), a leading global supplier of silicon carbide substrate wafers and devices. After giving management ample time to ramp production at its new Mohawk Valley facility, we closed the position due to continued execution missteps and cyclical headwinds impacting electric vehicle, industrial and energy applications that have repeatedly pushed the company’s path to profitability further out.”
While we acknowledge the potential of WOLF to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than WOLF but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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