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.
A close-up of a laptop screen, displaying graphically enhanced programming for a software project.
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).
15. Globant SA (NYSE:GLOB)
Number of Hedge Fund Holders In Q4 2024: 25
Globant SA (NYSE:GLOB) is a digitally native technology services company that provides software solutions.
The stock is down significantly so far in 2025 due to its Q4 2024 earnings report being underwhelming. The company reported $642.5 million in revenue, 0.2% below analyst expectations.
Although it beat earnings per share estimates with $1.75 vs. $1.74, the slight miss on the top line spooked investors and triggered a sell-off.
Competitive pressures in the IT services sector have played a role. Globant operates in a crowded market with rivals like EPAM Systems and Accenture, and new entrants are vying for digital transformation contracts.
This competition, paired with a perceived slowdown in demand, has eroded investor confidence in Globant’s ability to maintain its historically high growth rates.
The consensus price target of $219.71 implies 68% upside.
GLOB stock is down 39.05% year-to-date.
14. Core Scientific Inc (NASDAQ:CORZ)
Number of Hedge Fund Holders In Q4 2024: 66
Core Scientific Inc (NASDAQ:CORZ) is a Bitcoin mining company that is transitioning into a high-performance computing (HPC) company.
The stock is down significantly so far in 2025 as the company reported disappointing financials in Q4 2024, with a net loss of $265.5 million and revenue dropping to $94.9 million from $141.9 million the previous year.
The broader cryptocurrency market has also pressured Core Scientific. Bitcoin mining profitability has weakened due to rising network difficulty and the April 2024 Bitcoin halving, which cut mining rewards in half.
These factors have squeezed margins for miners like Core Scientific. Meanwhile, the company’s shift to HPC and AI infrastructure has not yet offset these losses fully.
The consensus price target of $19 implies 124% upside.
CORZ stock is down 39.50% year-to-date.