Wall Street’s major indices ended in the negative territory on Wednesday as investors parked funds to minimize risks from the resumption of trade war among the world’s largest economies, with a fresh round of tariffs scheduled to be implemented next week.
The tech-heavy Nasdaq fell the hardest, down 2.04 percent, followed by the S&P 500, down 1.12 percent. The Dow Jones declined by 0.31 percent.
According to President Donald Trump, all vehicles made outside of the US would be slapped with a 25-percent tariff.
The broader market downturn spilled over into 10 companies—predominantly AI stocks—further dampened by a cautious outlook on the industry. In this article, we listed Wednesday’s 10 worst performers and detailed the reasons behind their drop.
To come up with the list, we considered only the stocks with $2 billion market capitalization and $5 million in trading volume.
Stock market reports printed on a sheet of paper. Photo by RDNE Stock Project on Pexels
10. SoundHound AI Inc. (NASDAQ:SOUN)
Shares of SoundHound AI fell for a second day on Wednesday, losing 8.04 percent to finish at $9.38 apiece as investors continued to sell off positions following bearish outlooks from experts.
In his recent episode of Mad Money, host Jim Cramer suggested selling SOUN, saying that it was a “meme stock.”
“I think it’s a meme stock and I’m just going to call them as meme stocks from now on because, look, you can’t really value it… I can’t help you with something like SoundHound, because it’s a meme stock. It’s going to go wherever the meme people want it to go and good luck with them,” he said.
Meanwhile, sentiment was further dampened by a top Alibaba (NYSE:BABA) executive’s comments that the AI industry has become a bubble.
“I’m still astounded by the type of numbers that are being thrown around in the U.S. about investing into AI,” said BABA Chairman Joe Tsai.
“I think in a way, people are investing ahead of the demand that they’re seeing today, but they are projecting much bigger demand,” he said.
9. Super Micro Computer Inc. (NASDAQ:SMCI)
Super Micro fell for a third straight day on Wednesday, shedding 8.86 percent to close at $37.04 apiece as investor sentiment was dragged by sour comments on the general Artificial Intelligence industry coupled with an investment banking firm’s rating downgrade for the company.
At the HSBC Global Investment Summit in Hong Kong, Alibaba (NYSE:BABA) Chairman Joe Tsai warned investors about the ongoing bubble in AI.
“I’m still astounded by the type of numbers that are being thrown around in the U.S. about investing into AI,” he said. “I think in a way, people are investing ahead of the demand that they’re seeing today, but they are projecting much bigger demand.”
Meanwhile, Goldman Sachs lowered its stock rating for SMCI to “sell” from “neutral” previously, amid heightened competition in AI servers, margin pressures, and valuation concerns.
It also reduced its price target for the company by 20 percent to $32 from $40 previously, which was 13.6 percent lower than the company’s closing price on Wednesday.
