Looking at the biggest loser of 2024 on the Nasdaq 100, it's clear that even the most powerful can stumble.
The name is Intel, a once-brilliant giant in the semiconductor industry that is now grappling with the harsh reality of declining market share, lagging innovations, and increasingly intense competition.
The Nasdaq 100 is up 25% in 2024, and the list of the year's worst performers tells a story of shifting investor priorities and challenges for sectors other than ai, such as biotech.
The bottom five stocks in the Nasdaq 100 Index in 2024 are Intel, MongoDB, Biogen, Dexcom and Microchip technology.
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What happened to Intel? (Under 60%)
Intel's decline did not begin in 2024: it is the result of many strategic mistakes.
In the mid-2000s, the company (INTC) famously passed up the opportunity to develop the chip for Apple's iPhone, paving the way for rivals like Qualcomm to dominate the mobile market.
In the following years, Intel fell behind Taiwan Semiconductor in manufacturing. By the 2010s, TSMC had surpassed Intel in producing faster and smaller chips.
Related: Analysts reset Intel stock forecasts after CEO exits
Now, Intel is lagging behind in the ai wave, where companies like Nvidia have become leaders in advanced GPUs and ai hardware.
Intel's June quarter was brutal: earnings per share missed expectations by 80%, coming in at just 2 cents, while revenue fell 1% to $12.83 billion. Although the September quarter beat estimates, revenue fell 6% and Intel posted a net loss of nearly $17 billion.
The company has taken recovery measures, including a cost-cutting plan that involved laying off 16,500 employees and reducing its real estate footprint.
But analysts remain cautious about the stock, especially after Pat Gelsinger resigned as CEO.
According to Stifel, Intel could further modify its strategy, further delaying its ability to correct the direction of its technology roadmap towards the rapidly evolving total addressable ai market, thefly.com reported.
Truist analyst William Stein recently lowered his price target on Intel to $22 from $26 and affirmed a hold rating, reiterating a cautious view of the semiconductor and ai sector.
MongoDB: Growth Questions (down 43%)
While Wedbush expects an ai software boom in 2025, the investment firm remains unsure whether MongoDB will be able to share in that growth.
Related: Analyst Says Big Change in ai Coming in 2025 Is Big Tailwind for Two stocks
MongoDB (MDB) develops commercial support for open source databases, enabling companies to manage data in the cloud, on-premises, and in hybrid environments.
The company had a better third-quarter earnings report, but “conservative” fourth-quarter forecasts and the departure of chief financial officer Michael Gordon “are other points of contention” for investors, Barclays said. The investment firm raised its price target on MongoDB to $400 from $375 with an Overweight rating on the stock.
Scotiabank raised its price target on MongoDB to $350 from $295, while maintaining a perform rating on the sector (effectively neutral). The firm advises investors to take a wait-and-see approach, citing the uncertainty of CIO controls on the benefits of ai and competition trends in the database market.
Research firm Monness Crespi downgraded MongoDB to sell from neutral with a price target of $220, thefly.com reported.
MongoDB's Atlas is “engaged in a prolonged growth slump and without the powerful tailwind implicit in the industry's ai propaganda,” the analyst said.
Biogen (41% drop), Dexcom (37% drop): biotech optimism in Canaccord
The healthcare sector did not do well in 2024. The Health Care Select Sector SPDR ETF (XLV) only up 3%, and the iShares Nasdaq Biotechnology ETF (IBB) fell 2% in 2024.
Two healthcare companies, Biogen and Dexcom, are among the five worst-performing companies on the Nasdaq 100.
biogen, (BIB) developer of therapies for neurological diseases, faced setbacks with the Alzheimer's drug Leqembi, declining sales of key treatments for multiple sclerosis, and reduced revenue from royalties and contract manufacturing.
BMO Capital recently downgraded Biogen to market perform from outperform with a price target of $164, down from $230, thefly.com reported Dec. 20.
The investment firm said the downgrade reflected slower growth at Leqembi, reduced revenue from MS treatments, weak performance from rare diseases and fewer near-term catalysts.
“Efforts to change the direction of the company will take time to materialize,” the analyst said.
dexcom (DXCM) a maker of insulin monitoring devices, faced an uphill road in 2024, in part due to the growing use of weight-loss drugs.
Dexcom CEO Kevin Sayer said in July that the company was missing “a large number of new patients,” CNBC reported. The stock fell 40% in July after cutting all guidance for the fiscal year.
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In December, Canaccord analyst William Plovanic raised DexCom's price target to $99 from $89 and affirmed a Buy rating on the stock.
Canaccord remains bullish on the medtech sector heading into 2025. The firm expects growing investor interest as small- and mid-cap valuations remain low, M&A activity increases and the market for IPO gains momentum.
The firm also highlights the impact of ai on the industry.
Microchip technology: Fall in sales (Down 36%)
While microchip technology (MCHP) and Intel focus on different segments (Intel mainly on central processing units and data centers and Microchip on microcontrollers and analog devices), their declines share common problems such as slowing demand and competition within the semiconductor industry.
Microchip sales have plummeted. In the quarter ended September 30, the company reported a nearly 50% decline in net sales.
“We continue to navigate through an inventory correction that is occurring amid macroeconomic weakness for many manufacturing companies,” said CEO Ganesh Moorthy.
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