Ten stocks lost their momentum on Thursday, mirroring a mostly pessimistic broader market, as investors took path from cautious outlooks in their respective industries and earnings results, among others.
Meanwhile, Wall Street’s major indices finished mixed, with the Dow Jones the sole gainer by 0.11 percent. The S&P 500 and the Nasdaq both declined by 0.13 percent and 0.72 percent, respectively.
In this article, we spotlight 10 of the worst-performing stocks on Thursday and break down the reasons behind their weak performance.
To come up with the list, we focused exclusively on stocks with more than $2 billion in market capitalization and 5 million shares in trading volume.
Photo by Tima Miroshnichenko on Pexels
10. ServiceNow Inc. (NYSE:NOW)
ServiceNow dropped for a third straight day on Thursday, shedding 9.94 percent to close at $116.73 apiece as investors turned cautious over the threats of AI for the broader software-as-a-service (SaaS) industry, overshadowing the company’s strong earnings performance in the fourth quarter of last year.
ServiceNow Inc. (NYSE:NOW) declined alongside its counterparts, namely SAP, Salesforce, Adobe, and Datadog, among others, after JPMorgan raised concerns that advances in AI capabilities could challenge SaaS companies selling subscription-based products.
It said that the malaise in software sentiment persists, coupled with a seemingly paradoxical and vicious cycle of depressed valuations, with maintained, if not rising, investor expectations.
Meanwhile, ServiceNow Inc. (NYSE:NOW) reported higher earnings in the fourth quarter of the year, with net income jumping by 4 percent to $401 million from $384 million in the same period a year earlier, bringing its full-year net profit up by 23 percent to $1.75 billion from $1.42 billion year-on-year.
Total revenues increased by 21 percent to $3.57 billion from $2.96 billion, bringing its full-year tally up by 21 percent to $13.3 billion from $10.98 billion year-on-year, and beating earlier guidance.
For the first quarter, ServiceNow Inc. (NYSE:NOW) is gunning for subscription revenues between $3.650 billion and $3.655 billion, or an implied growth of 21.5 percent year-on-year.
For the full year, subscription revenues are projected to hit $15.53 billion to $15.57 billion, or a 20.5 percent to 21 percent increase from 2025 levels.
9. Microsoft Corp. (NASDAQ:MSFT)
Microsoft saw its share prices drop by 10 percent on Thursday to close at $433.50 apiece as investors resorted to a combination of profit-taking following five straight days of gains, while turning cautious over its heavy spending and exposure to OpenAI.
In an earnings call during the day, Microsoft Corp. (NASDAQ:MSFT) said that net income in the second quarter ending December 31, 2025 jumped by 59.5 percent to $38.46 billion from $24.1 billion in the same period a year earlier, while revenues grew by 17 percent to $81.3 billion from $69.6 billion year-on-year. Of the total, cloud revenues surged by 26 percent to $51.5 billion.
However, the strong performance was overshadowed by a significant 66 percent jump in capital expenditures during the year—at $37.5 billion—especially with Microsoft Corp.’s (NASDAQ:MSFT) 45 percent OpenAI backlog.
In an interview with CNBC, Jefferies analyst Brent Thill raised concerns about the technology giant’s exposure to OpenAI, saying that the backlog “is really good, but the disclosure that OpenAI is 45 percent of their backlog, it goes back to the situation where, ‘Can OpenAI achieve these financial goals to pay Oracle, Microsoft and many of the providers?’”
Previously, Microsoft Corp. (NASDAQ:MSFT) forecasted capex of $140 billion for the fiscal year ending June 2026.
Hedge Fund Resource Center