Ten stocks capped off Monday’s trading with losses, amid company-specific developments that sparked investor selling.
Meanwhile, Wall Street finished mixed, with the Dow Jones the sole loser by 0.14 percent. The Nasdaq and the S&P 500 both ended up by 0.71 percent and 0.36 percent, respectively.
In this article, we identified the 10 worst-performing mid-cap stocks on Monday and broke down the reasons behind their decline.
To come up with the list, we focused exclusively on mid-cap stocks with more than $2 billion in market capitalization and 5 million shares in trading volume.
The New York Stock Exchange building. Photo by Дмитрий Трепольский on Pexels
10. Rocket Companies Inc. (NYSE:RKT)
Rocket Companies extended its losing streak to a third straight day on Monday, shedding 4.83 percent to close at $16.94 apiece as investors continued to digest the completion of its acquisition of Mr. Cooper Group for $14.2 billion.
Last Wednesday, Rocket Companies Inc. (NYSE:RKT) announced that it officially merged with Mr. Cooper Group, bringing together one of the leading home loan and mortgage service providers in the US.
Following the news, shares of Rocket Companies Inc. (NYSE:RKT) began to decline to have already lost 13.5 percent in just the past three trading days.
The drop may have also been influenced by a leadership change in Rocket Mortgage, with Mr. Cooper CEO Jay Bray emerging as its new president and CEO, directly reporting to Rocket Companies Inc. (NYSE:RKT) CEO Varun Krishna. Bray will also join the listed firm’s board of directors.
Lastly, part of the acquisition will also rebrand Mr. Cooper and all its servicing functions to those under the Rocket umbrella.
9. Starbucks Corp. (NASDAQ:SBUX)
Starbucks dropped for a second day on Monday, slashing 4.99 percent to finish at $82.11 apiece as investors unloaded portfolios to mitigate risks from development uncertainties, following news of workforce reduction and key leadership changes.
Over the past few days, Starbucks Corp. (NASDAQ:SBUX) Chief Executive Officer Brian Niccol announced that the company would close underperforming stores in the US, cut 900 non-retail partner roles, and freeze a number of job positions as part of its turnaround strategy.
Following a review of its North America portfolio, Niccol told employees that they were able to identify locations that were unable to create the physical environment our customers and partners expect,” and where it does not see a “path to financial performance.”
Niccol did not elaborate on the number of stores to be closed, but said that affected stores and employees will be notified immediately.
In other developments, Starbucks Corp. (NASDAQ:SBUX) announced that its chief technology officer, Deb Hall Lefevre, stepped down from her role without a permanent replacement. She will be temporarily replaced by Ningyu Chen, previously senior vice president of global experience technology.
Lefevre’s resignation followed announcements of a second round of deep cuts in corporate roles as Niccol pushes a technology revamp to make labor more efficient.
8. Verizon Communications Inc. (NYSE:VZ)
Verizon dropped its share prices by 5.11 percent on Monday to close at $41.44 apiece as investors digested leadership changes in the company, with former PayPal chief Dan Schulman taking the CEO position effective immediately.
Schulman is set to replace Hans Vestberg, who led Verizon Communications Inc. (NYSE:VZ) for more than eight years. He will remain as special advisor through October 4, 2026, and focus on ensuring a smooth transition, including the integration of Frontier Communications, which is expected to close in the first quarter next year.
Meanwhile, Mark Bertolini was elected chairman of the board of directors.
“Leading Verizon over the past 8 years has been the greatest privilege of my career, and I’m filled with pride and gratitude for what we’ve accomplished. We built America’s best and most trusted network that will serve our customers and company for years to come. Dan has the vision to lead us forward, and will guide Verizon into a future of growth and innovation,” Vestberg said in a post on LinkedIn.
“I will remain a loyal Verizon customer and a V Teamer for life. I look forward to supporting Dan and the rest of the team to ensure a smooth transition,” he noted.
Despite the leadership changes, Verizon Communications Inc. (NYSE:VZ) reaffirmed its previously guided financial outlook for full-year 2025. It is expected to report its third-quarter earnings performance on October 29.
7. Sandisk Corp. (NASDAQ:SNDK)
Sandisk snapped a three-day winning streak on Monday, losing 5.64 percent to finish at $121.17 apiece as investors began to book profits to take advantage of the previous days’ gains.
On the same day, Sandisk Corp. (NASDAQ:SNDK) announced that it would release the results of its first quarter earnings performance in the first quarter of fiscal year 2026 on November 6, during which investors will closely watch out for its full fiscal year outlook.
For the first quarter, Sandisk Corp. (NASDAQ:SNDK) is targeting to book revenues of $2.10 billion to $2.20 billion, and diluted earnings per share of $0.70 to $0.90.
In other news, Sandisk Corp. (NASDAQ:SNDK) announced that it kicked off, along with Kioxia Corp., the operations of its Fab2 (K2) production facility in Iwate Prefecture, Japan.
The Fab2 facility has the capability to produce eighth-generation, 218-layer 3D flash memory, featuring the company’s revolutionary CBA (CMOS directly Bonded to Array) technology, and future advanced 3D flash memory nodes to meet growing demand for storage driven by the artificial intelligence industry.
Production will ramp up in stages over time in line with market trends, with significant output expected to begin in the first half of 2026.
6. UWM Holdings Corp. (NYSE:UWMC)
UWM Holdings extended its losing streak to a third consecutive day on Monday, dropping 6.35 percent to finish at $5.60 apiece as investors continued to unload positions amid uncertainties in an ongoing class action lawsuit that alleged the company of scheming with brokers to push mortgages higher for homebuyers.
In an 87-page decision last week, US District Judge Brandy McMillion dismissed most allegations by the plaintiffs, including racketeering, saying that the latter had not plausibly shown that UWM Holdings Corp. (NYSE:UWMC) caused them harm.
Still, the judge said that plaintiffs could pursue claims for now after UWM Holdings Corp. (NYSE:UWMC) violated a federal law that protects consumers in mortgage loan transactions.
Commenting on the decision, UWM Holdings Corp. (NYSE:UWMC) said: “This decision confirms the entire case is nearly resolved in our favor and underscores that there was no merit from the start to the allegations.”
It said it was confident that it would prevail on the remaining claims.
5. Lithium Americas Corp. (NYSE:LAC)
Lithium Americas fell by 6.53 percent on Monday after touching a new 52-week high, as investors took path from an investment firm’s “sell” recommendation for its stock.
In intra-day trading, Lithium Americas Corp. (NYSE:LAC) soared to its highest price of $9.48 before giving up gains to end the day at $8.45 apiece.
This followed Scotiabank’s market note, giving the company a “sell” recommendation, saying that the stock can no longer support the valuation after skyrocketing by 200 percent over the past two weeks alone.
“We failed to appreciate how a heated bull market would interpret [President Donald] Trump’s magic touch, on a thematic commodity starving for attention… despite the magic touch being dilutive to shareholders,” Scotiabank said.
“Perhaps, investors believe the DoE (Department of Energy) will backstop delays/cost overruns – i.e., LAC is now too important to fail.”
“We encourage investors to take profits on a remarkable run, and reload at lower levels.”
Last week, the US government announced that it was taking a 10 percent stake in the company and its Thacker Pass mine site in Nevada, as it aims to support the domestic production of lithium and reduce the country’s reliance on imports.
4. American Eagle Outfitters, Inc. (NYSE:AEO)
American Eagle fell for a 6th straight day on Monday, slashing 6.97 percent to close at $15.76 apiece as investors shifted funds into higher-yielding assets such as artificial intelligence stocks amid the company’s lack of fresh catalysts to spark buying appetite.
However, a technical buying is expected to occur by Friday, October 10—the last day to own shares to be able to receive $0.125 worth of quarterly dividends, payable on October 29, 2025.
The dividends followed the American Eagle Outfitters, Inc.’s (NYSE:AEO) second-quarter earnings results, with revenues dipping 1 percent to $1.28 billion from $1.29 billion in the same period last year. Net income also finished flat at $77 million.
For the third and fourth quarters of 2025, American Eagle Outfitters, Inc. (NYSE:AEO) is looking to book a growth of low single digits in comparable sales, but flat on a full fiscal year basis.
3. Fermi Inc. (NASDAQ:FRMI)
Fermi extended its losing streak to a third consecutive day on Monday, losing 7.87 percent to end at $26.35 apiece as investors continued to take profits to take advantage of the stock’s 25 percent upside potential.
Fermi Inc. (NASDAQ:FRMI), a newly listed company, debuted on the stock market last Wednesday, offering 32.5 million shares at an initial public offering (IPO) price of $21 apiece, raising as much as $682 million.
In line with the offer, Fermi Inc. (NASDAQ:FRMI) also granted its underwriters a 30-day option to purchase up to an additional 4.87 million shares at the IPO price, less underwriting discounts and commissions.
In other developments, Fermi Inc. (NASDAQ:FRMI) told the Securities and Exchange Commission on Monday that it entered into an employment agreement with Toby Neugebauer to serve as the company’s chief executive for a three-year term with automatic successive one-year renewals, unless earlier terminated.
In line with the agreement, Neugebauer will receive an annual base salary of $500,000.
Fermi is pioneering the development of next-generation electric grids that deliver highly redundant power at a gigawatt scale, required to create next-generation artificial intelligence.
2. Quantum Computing Inc. (NASDAQ:QUBT)
Quantum Computing snapped a three-day winning streak on Monday, losing 10 percent to close at $22.16 apiece, as investors unloaded portfolios following a $750 million share sale that could dilute existing shareholdings.
In a statement, Quantum Computing Inc. (NASDAQ:QUBT) said it entered into a securities purchase agreement with institutional investors for the sale of more than 37 million common shares priced at the market.
The offer is expected to close on Wednesday, October 8, subject to closing conditions.
Quantum Computing Inc. (NASDAQ:QUBT) said it intends to use the net proceeds to fully finance commercialization efforts, pursue strategic acquisitions, establish volume production capabilities, expand sales and engineering personnel, as well as for working capital and other general corporate purposes.
“Total capital raised since November 2024 is now $1.64 billion, positioning QCi with the strongest balance sheet among publicly traded quantum computing companies and providing what we believe is sufficient funding to execute our current business plan through 2028. The support from our existing investors through this recent raise is validation of our vision, technology, and roadmap,” said Quantum Computing Inc. (NASDAQ:QUBT) CEO Yuping Huang.
“Our focus now shifts to expedite the transition from a quantum technology innovation company to a leading quantum hardware manufacturer, progressing our mission of putting quantum into the hands of people,” he added.
1. AppLovin Corporation (NASDAQ:APP)
AppLovin dropped for a fourth consecutive day on Monday, losing 14.03 percent to end at $587 apiece after it triggered an investigation by the Securities and Exchange Commission (SEC) to look into its data collection practices.
A report by Bloomberg, citing people privy to the matte,r said that the SEC is looking into allegations that AppLovin Corporation (NASDAQ:APP) violated service agreements with its platform partners to deliver more targeted advertising to consumers.
Bloomberg added that the probe is being handled by the agency’s enforcement officials, focused on cyber and emerging technologies.
The investigation followed a complaint against the company, alongside short-seller reports, earlier this year.
Fuzzy Panda Research claimed in February that AppLovin Corporation (NASDAQ:APP) misappropriated data from Meta, while Culper Research accused the company of exploiting application permissions to enable advertisements that could trigger unauthorized app installations on user devices.
Meanwhile, Muddy Research said in March that AppLovin Corporation (NASDAQ:APP) collected and structured user IDs from key platform partners.
For its part, the listed firm said it engaged a law firm to investigate the allegations.
While we acknowledge the potential of APP to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than APP and that has 100x upside potential, check out our report about this cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email below.
