Why Affirm Holdings Inc. (AFRM) Crashed On Tuesday?

We recently published a list of 10 Firms Heavily Hit by Market Pessimism. In this article, we are going to take a look at where Affirm Holdings Inc. (NASDAQ:AFRM) stands against other firms heavily hit by market pessimism.

Wall Street finished in the red territory on Tuesday, as investors repositioned their portfolios ahead of the Fed rate decision on Wednesday.

The Nasdaq dropped the highest among its peers, declining 1.71 percent. The S&P 500 followed with a 1.07-percent loss, while the Dow Jones decreased by 0.62 percent.

The market pessimism spilled over to various sectors, with 10 companies notably hit the most.

In this article, we have identified the 10 worst performers on Tuesday and detailed the reasons behind their drop.

To come up with the list, we only considered the stocks with a $2-billion market capitalization and $5 million in trading volume.

An entrepreneur launching her new brand on the company’s platform, looking confident and joyful.

Affirm Holdings Inc. (NASDAQ:AFRM)

Affirm Holdings dropped for a second day on Tuesday, losing 8.88 percent to close at $43.70 apiece as investors continued to sell off positions following news that it was replaced by a Swedish company as the exclusive provider of installment loans at Walmart stores in the US.

On Monday, Swedish AI-powered payments and commerce network firm Klarna said that it bagged a partnership agreement with Walmart to provide Buy Now, Pay Later (BNPL) promotions to its customers, a program that AFRM has been offering to the retailer since 2019.

Klarna said it would partner with OnePay, a leading consumer finance app, to exclusively offer installment loans for purchases for Walmart stores in the US.

Following the agreement, customers will expect to see Klarna installment loan options in Walmart’s checkout channels in the next few weeks.

Meanwhile, AFRM said in a statement that it will continue with its long-term strategy of competing on its products and entering into sustainable partnerships.

Overall, AFRM ranks 10th on our list of firms heavily hit by market pessimism. While we acknowledge the potential of AFRM 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. If you are looking for an AI stock that is as promising as AFRM but trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.