Wall Street finished in the red territory on Tuesday, as investors repositioned their portfolios ahead of the Fed rate decision on Wednesday.

The Nasdaq dropped the highest among its peers, declining 1.71 percent. The S&P 500 followed with a 1.07-percent loss, while the Dow Jones decreased by 0.62 percent.

The market pessimism spilled over to various sectors, with 10 companies notably hit the most.

In this article, we have identified the 10 worst performers on Tuesday and detailed the reasons behind their drop.

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

10. Affirm Holdings Inc. (NASDAQ:AFRM)

Affirm Holdings dropped for a second day on Tuesday, losing 8.88 percent to close at $43.70 apiece as investors continued to sell off positions following news that it was replaced by a Swedish company as the exclusive provider of installment loans at Walmart stores in the US.

On Monday, Swedish AI-powered payments and commerce network firm Klarna said that it bagged a partnership agreement with Walmart to provide Buy Now, Pay Later (BNPL) promotions to its customers, a program that AFRM has been offering to the retailer since 2019.

Klarna said it would partner with OnePay, a leading consumer finance app, to exclusively offer installment loans for purchases for Walmart stores in the US.

Following the agreement, customers will expect to see Klarna installment loan options in Walmart’s checkout channels in the next few weeks.

Meanwhile, AFRM said in a statement that it will continue with its long-term strategy of competing on its products and entering into sustainable partnerships.

9. IonQ Inc. (NYSE:IONQ)

IonQ saw its share prices drop by 9.03 percent on Tuesday to end at $22.68 each as investors repositioned portfolios amid a cautious broader market while waiting for fresh catalysts to boost buying appetite.

IONQ is currently participating in the ongoing week-long NVIDIA GTC event in San Jose, California where its executive chairman, Peter Chapman, will join a panel discussion on the current and future landscape of quantum computing.

With the theme, “Quantum Computing: Where We Are and Where We’re Headed,” investors will be looking out for further cues and business plans from the company.

In other news, IONQ was recently criticized by a short seller over its valuation, growth projections, and transparency.

In its report on Thursday, short seller Kerrisdale Capital criticized IONQ’s lofty growth projections and questioned the viability of its technology. It said that despite IONQ’s claims of significant technical and commercial milestones, the company was struggling with scalability.

“Although IONQ’s stock price has retreated from its all-time high, it is still trading at a value reaching 40 times its projected revenue for 2026,” the short seller said. “However, we believe IONQ is far from achieving new commercial success.”

8. AppLovin Corp. (NASDAQ:APP)

AppLovin fell by 9.13 percent on Tuesday to end at $278.84 each as investors stayed on the sidelines amid the lack of catalysts to boost buying appetite.

Additionally, investor caution lingered as the company was targeted for investigation by shareholder law firms on possible securities violations.

Over the past few days, shareholder law firms have been reminding APP investors to approach them and lead as plaintiffs for a class action lawsuit against APP.

According to the lawsuit, APP provided investors with material information concerning APP’s financial growth and stability.

“[APP’s]’ statements included, among other things, confidence in [its] launch of AXON 2.0 digital ad platform and using “cutting-edge AI technologies” to more efficiently match advertisements to mobile games, in addition to expanding into web-based marketing and e-commerce,” the law firm said in a press release on Tuesday.

“Moreover, defendants publicly reported impressive financial results, outlooks, and guidance to investors, all while using dishonest advertising practices.” APP has yet to comment on the allegations.

7. Hims & Hers Health Inc. (NYSE:HIMS)

Hims & Hers saw its share prices decline by 9.22 percent on Tuesday to close at $31.49 as investors soured on an investment bank’s price target for the company.

On Tuesday, Bank of America raised its price target for HIMS by $1 at $22 per share, but despite the higher target, the figure represented a 30-percent downside from HIMS’ Tuesday closing price.

In addition, Bank of America also assigned an “underperform” rating on HIMS.

Last month, HIMS saw a spike in sales from the Super Bowl event, but investors now doubt that it would sustain its momentum following the Food and Drug Administration’s (FDA) announcement that the bestselling Wegovy and Ozempic by HIMS’ competitor Novo Nordisk are now back in sufficient supplies and out from the shortage list.

It can be learned that HIMS has been making a compounded knock-off version of the two treatments.

6. Nebius Group (NASDAQ:NBIS)

Nebius dropped its share prices for a second day on Tuesday, losing 9.26 percent to end at $25.67 each as investors sold off positions in line with the broader market sentiment, shunning fresh business developments in the company.

On Tuesday, NBIS announced its role as an early adopter cloud provider of the NVIDIA Blackwell Ultra platform offering NVIDIA GB300 NVL72-powered instances by the end of 2025. The instances were said to be accelerated by 72 NVIDIA Blackwell Ultra GPUs.

NBIS said it plans to make NVIDIA Blackwell GPU capacity generally available to its US data centers by the second quarter of the year, with its New Jersey data center expected to be exclusive to the platform’s GPUs. Meanwhile, its facility in Kansas will deploy NVIDIA HGX B2000.

Meanwhile, NBIS was also named an ecosystem partner for the NVIDIA Dynamo Inference Engine, an open-source framework for the deployment of generative AI that increases DeepSeek-R1 throughput by 30x on NVIDIA Blackwell.

5. Super Micro Computer Inc. (NASDAQ:SMCI)

Super Micro declined by 9.63 percent on Tuesday to end at $37.9 apiece as investor sentiment for the company was largely influenced by the broader market pessimism that overshadowed fresh company updates.

On Tuesday, SMCI announced its support for the new NVIDIA RTX PRO 6000 Blackwell Server Edition GPUs across its GPU servers and workstation portfolios.

According to the company, more than 100 GPU-optimized systems designed for enterprise AI applications will adopt the server.

“Supermicro leads the industry with its broad portfolio of application-optimized GPU servers that can be deployed in a wide range of enterprise environments with very short lead times,” said SMCI President and CEO Charles Liang. ”Our support for the NVIDIA RTX PRO 6000 Blackwell Server Edition GPU adds yet another dimension of performance and flexibility for customers looking to deploy the latest in accelerated computing capabilities from the data center to the intelligent edge.”

4. Carvana Co. (NYSE:CVNA)

Carvana dropped its share prices by 10.71 percent on Tuesday to finish at $166.52 apiece as investors stayed on the sidelines amid the lack of fresh catalyst to boost buying appetite.

In recent news, CVNA announced a foray into the new-car selling business, signaling a new business strategy to complement its core used cars selling business.

Earlier this month, CVNA announced that it finalized a deal on February 28 to acquire a franchised dealership in Arizona, signaling a potential shift into new vehicle sales for the online retailer, which has been focusing on selling used cars since its launch in 2013.

CVNA appears to be following in the footsteps of its competitor CarMax, which also ventured into the new cars business in the mid-1990s when it secured a franchise of Chrysler, a move that was later discontinued to focus entirely on used cars.

3. Reddit Inc. (NYSE:RDDT)

Reddit shares fell by 12.31 percent on Tuesday to close at $110.10 each following a “sell” recommendation from an investment firm.

While RDDT saw impressive user growth, analysts from Redburn raised doubts on its sustainability, calling it a “gift” from Alphabet’s Google.

Google made changes to its algorithm that led RDDT to nearly double its size in the past 18 months. However, Redburn believed that most of its users looking for answers to specific questions do not convert to log-in users, who are ultimately much more valuable.

“There is clear evidence that the boost to traffic and visibility from these changes is hitting a ceiling,” the analysts said, adding that “what Google giveth, it will taketh away.”

2. Warby Parker Inc. (NYSE:WRBY)

Warby Parker declined by 12.43 percent on Tuesday to end at $17.82 each as investors sold off positions over concerns about its business amid the ongoing trade war.

Late Monday, Bloomberg Law posted on its social media platform that Warby Parker was one of the companies warning its shareholders that “anti-American consumer sentiment fueled by the Trump administration’s tariff wars poses a business risk.”

In a filing last month, WRBY also said that it was unable to mitigate the full impact of current and future tariffs.

“Costs on a significant portion of our products may increase further, which could reduce our margins or force us to raise prices, and our financial results may be negatively affected. Further increases in China tariffs will impact our business, and our financial results may also be impacted by any resulting economic slowdown,” it said.

With a substantial number of components from suppliers in China, the company acknowledged that inventory management may be affected.

1. Sarepta Therapeutics Inc. (NASDAQ:SRPT)

Sarepta fell heavily by 27.44 percent on Tuesday to finish at $73.54 apiece as investors disposed of shares in the company following twin news of death associated with its treatment Elevidys.

On Tuesday, SRPT announced that a young patient succumbed to acute liver failure after receiving the Sarepta Elevidys therapy, the only FDA-approved gene therapy for Duchenne muscular dystrophy.

While the risk has already been flagged on the Elevidys label, acute liver injuries leading to death have not been previously reported in clinical testing or real-world use of Elevidys.

SRPT said that the patient had a recent cytomegalovirus (CMV) infection which allegedly contributed to the death. The infection can damage the liver, leading to CMV hepatitis, which is fatal to those with weak immune systems.

While we acknowledge the potential of SRPT 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 SRPT but trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

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