We recently published a list of Why These 15 Software Stocks Are Plunging In 2025. In this article, we are going to take a look at where Digimarc Corp (NASDAQ:DMRC) stands against other software stocks that are plunging in 2025.
The software sector has been anything but calm lately. These stocks were the darlings of Wall Street for the past few years but are now taking a beating due to tariff-related uncertainty and worries about AI’s lack of profitability.
News headlines have been almost entirely negative in the past two months due to weak macro data and big companies’ disappointing earnings results. This has caused a pivot toward profitability over growth.
Volatility often hides opportunity, and many of these software stocks are now oversold and can rebound when sentiment shifts. As such, it’s worth looking into the stocks that have plunged the most.
Methodology
For this article, I screened the worst-performing software stocks year-to-date.
I will also mention the number of hedge fund investors in these stocks. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A corporate executive shaking hands with a customer, sealing the deal for a Digimarc watermark solution.
Digimarc Corp (NASDAQ:DMRC)
Number of Hedge Fund Holders In Q4 2024: 11
Digimarc Corp (NASDAQ:DMRC) makes digital watermarking technologies that provide automatic identification solutions for commercial and government customers worldwide.
The stock is down significantly so far in 2025 as Digimarc reported a net loss of $0.40 per share in Q4 2024, which improved from $0.52 the previous year. However, this still signals ongoing profitability struggles.
Revenue for the quarter was $8.65 million and fell short of the $10.81 million expected by analysts.
Investors are growing wary because the company continues to post net losses, with a Q4 2024 loss of $8.6 million. The market has punished this lack of profitability.
Digimarc also announced a workforce reduction of 90 employees (40% of its staff) in Q4 2024 to cut costs and target positive non-GAAP net income by Q4 2025.
The consensus price target of $29 implies 102.66% upside.
DMRC stock is down 61.79% year-to-date.
Overall, DMRC ranks 2nd on our list of software stocks that are plunging in 2025. While we acknowledge the potential of DMRC 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 more promising than DMRC but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires
Disclosure: None. This article is originally published at Insider Monkey.
