The big and large-cap stocks have spearheaded the rally in the past two years, but Wall Street’s expectations have gotten ahead of many of their fundamentals. The Nasdaq briefly entered correction territory as the stock market cooled over the past week due to tariff fears and a perceived slowdown in the growth of AI, which then spilled into the data center industry.
Wall Street is now reassessing the growth premium they are paying for many of these large-cap stocks. A lot of them have tumbled in the past week and have done so in a much more severe way than the broader market.
That said, large companies have staying power, and many of them could now be undervalued.
A close-up of a financial chart jumping as the large-capitalization value sector changes.
Methodology
For this article, I screened the worst-performing large-cap stocks ($10 billion to $100 billion) 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).
15. Vertiv Holdings Co (NYSE:VRT)
Number of Hedge Fund Holders In Q4 2024: 92
Vertiv Holdings Co (NYSE:VRT) is a data center company that makes digital infrastructure products.
The stock is down significantly so far in 2025, mostly due to concerns about slowing demand for cooling systems in AI data centers. That’s despite solid Q4 EPS of $0.99 vs. $0.82 expected and revenue growth of 26% year-over-year.
The company issued softer-than-expected first-quarter guidance (EPS of $0.57-$0.63 vs. $0.64 expected).
Microsoft recently canceled some of its data center contracts, and the broader AI market pullback has dragged down VRT stock sharply since then.
The consensus price target of $137.14 implies 56.23% upside.
VRT stock is down 22.64% year-to-date.
14. Cava Group Inc (NYSE:CAVA)
Number of Hedge Fund Holders In Q4 2024: 47
Cava Group Inc (NYSE:CAVA) operates a chain of fast-casual Mediterranean restaurants.
The stock is down significantly so far in 2025 as Cava Group reported Q4 2024 earnings that missed analyst expectations by $0.01 per share.
The company provided lower-than-expected guidance for 2025 same-store sales growth. It expects growth of 6% to 8%, down from 13.4% in 2024. This expected slowdown caused the stock to plunge immediately.
Moreover, tariffs could also cause higher prices for customers. This could slow down growth if Cava passes on costs to customers or causes margin compression.
Rising input costs related to new menu items and incremental wage investments have already impacted restaurant-level profit margins slightly.
The consensus price target of $131.47 implies 51.64% upside.
CAVA stock is down 23.09% year-to-date.