A lackluster trading persisted on the stock market anew on Wednesday, with the three major indices finishing mixed, as investors digested news of the US economy’s contraction in the first quarter of the year, triggering fears of recession.
Among all major indices, only the Dow Jones and S&P 500 ended in the green, up 0.35 percent and 0.15 percent, respectively. In contrast, the tech-heavy Nasdaq dipped by 0.09 percent.
Ten companies also mirrored the wider market downturn, predominantly due to dismal earnings performance and tempered growth outlook for the remainder of the year.
In this article, we have named 10 of the worst-performing stocks on Wednesday and detailed the reasons behind their drop.
To come up with the list, we considered only the stocks with a $2-billion market capitalization and $5-million trading volume.
A stock market chart. Photo by Arturo A on Pexels
10. Reddit Inc. (NYSE:RDDT)
Reddit snapped a six-day winning streak on Wednesday, losing 4.56 percent to close at $116.57 apiece as investors resorted to profit-taking while digesting an investment firm’s price target downgrade on its stock.
On Tuesday, analysts from Bernstein lowered their price target for Reddit Inc. (NYSE:RDDT) by 27 percent to $110 from $150 previously and maintained their underperform rating on the shares.
According to the analysts, the adjustment was based on concerns about the declining app downloads during the first quarter of the year, albeit the figure saw a pickup in April.
Additionally, the traffic originating from Google has tapered off year-to-date, including after another algorithm update from the search engine giant towards the end of April.
Apart from Bernstein, Reddit Inc. (NYSE:RDDT) also earned a lower price target from Deutsche Bank, at $180 versus $235 previously.
Reddit Inc. (NYSE:RDDT) is set to announce the results of its first quarter earnings performance on Thursday, May 1, 2025.
9. Etsy, Inc. (NASDAQ:ETSY)
Etsy dropped its share prices by 5.74 percent on Wednesday to finish at $43.48 apiece as investors soured on the company’s financial performance for the first quarter of the year.
In its earnings release, Etsy, Inc. (NASDAQ:ETSY) said it swung to a net loss of $52 million from a $63 million net profit in the same period a year earlier, reflecting an impairment charge of $101.7 million to the goodwill of Reverb.
Revenues, on the other hand, ended flat at $651 million, but were driven by significant growth in on-site advertising revenue for both Etsy and Depop, a full quarter impact of the seller set-up fee, and continued benefit from Payments expansion.
Further weighing down on the sentiment was a notable decline in the number of active buyers year-on-year, down 3.4 percent to 88.5 million.
“We are keeping a clear eye on Etsy’s long-term opportunities, while also staying nimble in the face of uncertainty given recent tariff announcements and the fluid state of consumer confidence in our core markets,” said ETSY Chief Financial Officer Lanny Baker.
8. Pony AI Inc. (NASDAQ:PONY)
Pony AI saw its share prices drop by 5.8 percent on Wednesday to finish at $9.09 apiece as investors continued to book profits following Monday’s surge, with news of its entry into the robotaxi industry already priced in by the investing public.
According to reports earlier this week, Pony AI Inc. (NASDAQ:PONY) is setting its sights on the robotaxi industry, especially that it is now able to build its autonomous driving system for 70 percent less.
Pony AI Inc. (NASDAQ:PONY) is originally an autonomous driving technology company that only supports carmakers in making vehicles autonomous.
In an interview with CNBC on Friday, PONY CEO James Peng said that the firm is currently in talks with Tencent Cloud to offer robotaxi services on the latter’s WeChat and other applications. He said both parties will benefit from the latter’s huge user base and cloud offerings.
In other news, PONY is set to release the results of its first quarter earnings performance on Tuesday, May 20, 2025.
7. Hertz Global Holdings, Inc. (NASDAQ:HTZ)
Hertz Global dropped for a second day on Wednesday, losing 7.21 percent to end at $6.82 apiece as investors sold off positions following news that it plans to raise as much as $500 million from debt.
Last week, the company said that it was looking to tap the debt market anew to raise funds for the company’s liquidity and extend the maturity of a revolving credit facility that is set to mature next year.
This is on top of a $6 billion debt already in its books, which similarly includes another $500 million junk bond issued in December last year.
In other news, Hertz Global Holdings, Inc. (NASDAQ:HTZ) said it would announce the results of its first quarter earnings performance on May 12, 2025.
Hertz Global Holdings, Inc. (NASDAQ:HTZ) is one of the leading car rental operators globally. It owns Hertz, Dollar, and Thrifty vehicle rental brands throughout North America, Europe, the Caribbean, Latin America, Africa, the Middle East, Asia, Australia, and New Zealand.
6. Archer Aviation Inc. (NYSE:ACHR)
Archer Aviation dropped its share prices by 7.34 percent on Wednesday to finish at $8.33 apiece as investors continued to trade sideways amid the lack of fresh catalysts to spark buying interest, while repositioning portfolios ahead of its earnings release.
According to the company, it is scheduled to release its earnings results after market close on Monday, May 12, 2025.
In recent news, the UAE General Civil Aviation Authority approved the design of the first hybrid heliport to be located at the Abu Dhabi Cruise Terminal at Zayed Port, a leading hub for the regional cruise industry that welcomes more than 650,000 visitors annually. The approval paved the way for the looming takeoff of Archer Aviation Inc.’s (NYSE:ACHR) commercial air taxis.
The new heliport was designed in partnership with ACHR, AD Ports Group, and Falcon Aviation Services, and will accommodate both traditional helicopters and electric vertical take-off and landing (eVTOL) aircraft.
5. Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH)
Norwegian Cruise Line fell by 7.77 percent on Wednesday to end at $16.03 apiece as investor sentiment was dampened by its dismal earnings performance in the first quarter of the year.
In a statement, the company said it swung to a net loss of $40.2 million from a net income of $17.3 million in the same period a year earlier on the back of lower capacity days and foreign exchange losses.
Revenues dropped by 2.9 percent to $2.127 billion from $2.191 billion year-on-year, primarily due to a decline in capacity days related to its larger ships’ increased berths in dry dock, weighed down further by a reduction in passenger air participation rates.
Looking ahead, Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) updated its full-year guidance for 2025 to reflect recent booking trends and changes in the macroeconomic environment.
According to the company, it now expects net yield guidance to increase between 2 and 3 percent as compared with the previous guidance of 3 percent.
Adjusted net income is expected to be approximately $1.045 billion.
4. First Solar, Inc. (NASDAQ:FSLR)
First Solar extended its losing streak for a third straight day on Wednesday, shedding 8.32 percent to finish at $125.82 apiece as investors sold off positions following a plunge in net earnings performance in the first quarter of the year.
In its latest earnings release, First Solar, Inc. (NASDAQ:FSLR) said that its net income fell by 11 percent to $209.5 million from $236.6 million in the same period a year earlier, while net sales rose by 6 percent to $844 million from $794 million year-on-year.
Additionally, the company’s lowered growth outlook for the rest of the year helped drag down investor sentiment.
Amid the ongoing market uncertainties, First Solar, Inc. (NASDAQ:FSLR) said it is now projecting net sales to settle between $4.5 billion and $5.5 billion, lower than the $5.3 billion to $5.8 billion target previously.
Expected diluted earnings per share were also reduced to between $12.50 and $17.50 from the $17 to $20 previously.
3. CoStar Group, Inc. (NASDAQ:CSGP)
CoStar Group saw its share prices fall by 10.31 percent on Wednesday to finish at $74.17 apiece as investor sentiment was weighed down by a dismal earnings performance in the first quarter of the year.
In its latest earnings release, CoStar Group, Inc. (NASDAQ:CSGP) said it swung to a net loss of $14.8 million from a $6.7 million net income in the same period a year earlier, despite revenues jumping by 11 percent to $732.2 million from $656.4 million year-on-year.
The company said its net loss included a $31-million negative impact associated with its acquisition of Matterport.
Looking ahead, CoStar Group, Inc. (NASDAQ:CSGP) said it expects revenues to settle between $3.115 billion and $3.155 billion for the full year 2025, representing revenue growth of approximately 15 percent year-on-year at the midpoint of the range.
The company also expects the second quarter to grow by 14 percent to a range of $770 million to $775 million.
2. Super Micro Computer Inc. (NASDAQ:SMCI)
Super Micro dropped its share prices by 11.5 percent on Wednesday to finish at $31.86 apiece as investor sentiment was dragged down by its dismal preliminary earnings results in the third quarter of fiscal year 2025.
In a statement, Super Micro Computer Inc. (NASDAQ:SMCI) said that it expects net sales to settle between $4.5 billion and $4.6 billion in the said period, markedly lower than the $5 to $6 billion targeted previously.
Diluted net income per share was pegged at between $0.16 and $0.17 versus the $0.36 to $0.53 prior guidance.
The company said official figures will be announced after market close on Tuesday, May 6, 2025.
Following the announcement, investment firm Mizuho Securities cut its price target for Super Micro Computer Inc. (NASDAQ:SMCI) to $34 from $50 previously.
However, Mizuho acknowledged the company’s continued role as a key player in the artificial intelligence server space.
1. Snap Inc. (NYSE:SNAP)
Snap Inc. tumbled by 12.43 percent on Wednesday to close at $7.96 each as investor sentiment was dragged down by the lack of business outlook amid “uncertainty” about the future.
According to the company, it does not intend to share formal financial guidance for the second quarter of the year because of “macroeconomic conditions may evolve in the months ahead, and … this may impact advertising demand more broadly.”
It said that despite revenue growth in the first quarter of the year, its operations remained challenged by significant factors.
“We believe it is prudent to continue to balance our level of investment with realized revenue growth,” it said.
In the first quarter of the year, Snap Inc. (NYSE:SNAP) narrowed its net loss by 54 percent to $139.6 million from $305 million in the same period a year earlier.
Revenues were higher by 14 percent to $1.363 billion from $1.194 billion year-on-year.
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