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 Ibotta Inc (NYSE:IBTA) 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 deliveryman dropping off a package beside a rack of consumer packaged goods.
Ibotta Inc (NYSE:IBTA)
Number of Hedge Fund Holders In Q4 2024: 15
Ibotta Inc (NYSE:IBTA) is a technology company that operates the Ibotta Performance Network (IPN). This is a platform enabling consumer packaged goods brands to deliver digital promotions to over 200 million consumers.
The downward trend began after its initial public offering in April 2024, which marked it as Colorado’s largest tech IPO. However, the stock has struggled to maintain its early momentum.
In its Q4 2024 earnings, released on February 26, 2025, Ibotta reported a 1% year-over-year revenue decline to $98.4 million, missing analyst forecasts. Although full-year 2024 revenue grew 15% to $367.3 million, growth has slowed significantly from prior years, and Q1 2025 guidance projected revenue between $80 million and $84 million, well below the consensus estimate of $90.96 million.
A critical blow came from a March 20, 2025, report by short-seller The Bear Cave. The report cited waning consumer support, severe employee dissatisfaction, strained partner relationships, and allegations of fraud.
IBTA stock is down 40.06% year-to-date.
Overall, IBTA ranks 12th on our list of software stocks that are plunging in 2025. While we acknowledge the potential of IBTA 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 IBTA 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.
