Why Kingsoft Cloud Holdings Limited (KC) Crashed on Tuesday?

We recently published a list of 10 Stocks Kick Off Trading Week With Losses. In this article, we are going to take a look at where Kingsoft Cloud Holdings Limited (NASDAQ:KC) stands against other stocks kick off trading week with losses.

Wall Street’s main indices began the shortened trading week on a lackluster note, albeit finishing in the green, as investors continued to digest corporate earnings results.

The S&P 500 led the charge, recording a modest 0.24 percent gain. However, the Dow Jones and the tech-heavy Nasdaq posted gains of only 0.02 percent and 0.07 percent, respectively.

Ten companies performed poorly on Tuesday amid a series of negative catalysts that disappointed investors. In this article, we identified the 10 worst performers and detailed the reasons behind their drop.

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

An executive standing in front of their headquarters building, proudly symbolizing the company’s achievements.

Kingsoft Cloud Holdings Limited (NASDAQ:KC)

Shares of Kingsoft Cloud Holdings Limited (NASDAQ:KC) fell by 8.84 percent on Tuesday to end at $18.97 apiece as investors turned into sellers to book profits following a surge in its prices on Friday.

Last week’s investor optimism was fueled by news highlighting a breakthrough from China’s AI platform, DeepSeek, and that its continued advancements were expected to accelerate the creation of AI applications in China and benefit Chinese firms, including KC.

Lyon also significantly raised its price target for KC by 272 percent to $20.5 from $5.5 previously.

Kingsoft Cloud (NASDAQ:KC) has been earning a boost from DeepSeek over the past few weeks, particularly after Xiaomi, led by its chairman Lei Jun, poached one of DeepSeek’s top developers, Luo Fuli, to join Xiaomi’s AI development team.

The news boosted investor sentiment on hopes that any AI development in Xiaomi will create a domino effect on Kingsoft’s business in cloud computing.

Overall, KC ranks 6th on our list of stocks kick off trading week with losses. While we acknowledge the potential of KC 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 KC 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.