Why Sempra (SRE) Went Down on Tuesday

We recently published an article titled Two of 10 Worst-Performing Stocks Fall to All-Time Lows on Tuesday. In this article, we are going to take a look at where Sempra (NYSE:SRE) stands against the other stocks.

Wall Street extended a lackluster performance on Tuesday, with two of its major indices ending with marginal movements amid a series of key economic factors dampening investor sentiment.

Only the Dow Jones finished in the green territory, posting a 0.37 percent gain. In contrast, the S&P decreased by 0.47 percent while the tech-heavy Nasdaq fell by 1.37 percent.

Mirroring the mostly broader pessimism are 10 companies, with two even falling to new all-time lows. In this article, we have detailed the reasons behind their drop.

To come up with Tuesday’s worst performers, we considered only the stocks with $2 billion in market capitalization and $5 million in daily trading volume.

A power transmission tower with a desert sunset in the background, symbolizing power and energy.

Sempra (NYSE:SRE)

Sempra (NYSE:SRE) shares plummeted by 18.97 percent on Tuesday to close at $70.64 each as investor sentiment was dampened by a disappointing outlook for 2025 amid expected challenges that could put pressure on the company’s profitability.

In its earnings call, Sempra (NYSE:SRE) lowered its annual profit forecast following the rate case decision in California which came below its expectations.

Utilities use rate case proceedings to determine the amount that the customers will need to pay for electricity and natural gas services.

From $4.9 to $5.25 earnings per share forecast previously, Sempra (NYSE:SRE) now expects EPS to settle between $4.3 to $4.7.

“We’ve assumed higher interest expense as a result of higher capital investments in 2025,” the company said.

Sempra (NYSE:SRE) also raised its capital expenditure program by 16 percent over the next four years to improve grid resiliency amid rising energy demand from data centers for artificial intelligence.

Overall SRE ranks 2nd on our list of Tuesday’s worst performers. While we acknowledge the potential of SRE 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 SRE 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.