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 Palladyne AI Corp (NASDAQ:PDYN) 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 robotic process automation system in a modern datacenter.
Palladyne AI Corp (NASDAQ:PDYN)
Number of Hedge Fund Holders In Q4 2024: N/A
Palladyne AI Corp (NASDAQ:PDYN) makes AI and machine learning software for robotic systems.
The stock is down significantly so far in 2025 as volatility in small-cap tech stocks has intensified, and investors have rotated away from high-growth, speculative names like PDYN toward more stable assets.
Plus, the company’s revenue, while up 27% year-over-year in 2024, remains modest at $7.79 million.
Investor sentiment has also shifted because of Palladyne’s unproven commercial traction. The company launched its Palladyne IQ and Palladyne Pilot products for industrial robots and drones, with customer trials slated for 2025.
However, without significant contracts or revenue growth reported yet, uncertainty persists. This lack of tangible progress has fueled profit-taking after last year’s rally.
The consensus price target of $15 implies 103.8% upside.
PDYN stock is down 39.93% year-to-date.
Overall, PDYN ranks 13th on our list of software stocks that are plunging in 2025. While we acknowledge the potential of PDYN 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 PDYN but that 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.
