We recently compiled a list of the 8 worst-performing tech stocks of 2024. In this article, we’ll take a look at how DoubleVerify (NYSE:DV) stands compared to other worst-performing tech stocks in 2024.
One of the most popular sectors in the stock market is technology. This sector boasts an impressive track record of explosive returns and the potential for even greater gains. Similarly, the industry met expectations for 2024, with the Nasdaq 100 index up 21% year-to-date.
The tech sector’s impressive rally comes as investors avoid high interest rates and inflation, betting on stocks poised to benefit from the next industrial revolution. With artificial intelligence in its early stages of development, tech stocks with exposure to the fast-growing sector have exploded, with some becoming multitrillion-dollar empires.
Related articles: 10 Most Promising Growth Stocks According to Analysts and 10 Most Promising Growth Stocks According to Hedge Funds.
Mizuho analysts have already noted in a note to investors that generative AI is “driving growth and disruption across multiple markets, pushing the frontiers of innovation and productivity.” That’s because AI Server supports the development of the infrastructure that powers the AI revolution.
The technology sector continues to rise even as economists and analysts question the health of the global economy. China’s economy is slowing, and the government has introduced some stimulus and reforms that have done little to shake investor sentiment toward tech stocks.
Ray Dalio, founder of Bridgewater Associates, said China needs to implement “beautiful deleveraging” on top of recent stimulus and reforms to avoid serious debt problems.
“I think the changes that are happening now are great changes, but we still need to do debt restructuring. We need to do it right and that is part of the restructuring. That will be the difficult part. That will be the challenge. “I think it will be,” Dalio said.
Similarly, the U.S. economy is showing signs of lethargy, exemplified by a slowdown in the labor and manufacturing sectors. The US Federal Reserve planned a soft landing, cutting interest rates by 50 basis points to avoid a recession and underscoring that all can go wrong in the world’s largest economy.
Similarly, International Monetary Fund Managing Director Kristalina Georgieva warned that high debt and low growth pose significant risks to the global economy and could hurt stock markets.
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While significant progress has been made in supporting global economic recovery, the IMF chief believes there are challenges in debt servicing that could pose significant risks to the global economy.
“It’s not time to celebrate yet,” she told Karen Tso. “When we look at the challenges ahead, the biggest challenges are low growth and high debt. This is something we can and must improve on,” she added.
Nevertheless, investors continue to ignore all these concerns, buoyed by the impressive record-breaking earnings and revenue growth of some of the biggest tech companies. Rising geopolitical tensions in the Middle East and uncertainty stemming from the upcoming US election did little to sway investor sentiment towards tech stocks.
Nevertheless, after a dizzying rise, mega-cap tech stocks are starting to fall. With the recent economic downturn, new concerns about the economic situation have arisen. But with most economists believing there is little chance of a recession and that a Federal Reserve rate cut is imminent, once-high-flying stocks and overall market valuations remain a major challenge. There is.
This is an behind-the-scenes rotation, meaning investors are moving away from recent winners and into stocks that are underperforming. In this case, growth stocks are generally being replaced by value stocks.
Similarly, amidst the resilience of the broader technology sector, not all companies are achieving record results and delivering big returns for investors. In fact, some stocks have underperformed across the industry, with market capitalization declining by more than 50%.
Source: Pexels
our methodology
To create our list of worst-performing technology stocks for 2024, we ranked all technology companies based on year-to-date performance and selected the top 15 companies with the largest year-to-date losses. Finally, we ranked the stocks in descending order based on year-to-date losses.
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DoubleVerify Holdings, Inc. (NYSE:DV) is a technology company that provides a software platform for digital media measurement and data analysis. Advertisers primarily use its solutions to increase the effectiveness and quality of their advertising investments.
The company’s stock price fell more than 50.20% in terms of market capitalization as investors questioned the company’s growth metrics after the company released lower-than-expected sales forecasts for this year. Last year, management had predicted sales would rise 22%, but they lowered their first-quarter forecast to 17%, sparking unrest in the investment community.
DoubleVerify Holdings, Inc. (NYSE:DV) was forced to lower its full-year revenue outlook as customers refrained from spending on the platform, which impacted its revenue stream. High inflation and interest rates have hit the company’s customer base hard. The company has achieved revenue growth of more than 20% over the years. However, this is no longer the case as advertising costs are reduced.
In the second quarter, the advertising company reported mixed financial results. Revenue increased 17% year-over-year, but net income decreased to $7.5 million from $12.8 million in the year-ago period.
According to Insider Monkey’s database, 24 hedge fund portfolios held DoubleVerify Holdings, Inc. (NYSE:DV) at the end of the first quarter, down from 27 at the previous quarter.
London Company Small Cap Strategy says this about DoubleVerify Holdings, Inc. (NYSE:DV) in its Q2 2024 Investor Letter:
“Started with: DoubleVerify Holdings, Inc. (NYSE:DV) – DV develops a software platform for digital media measurement, data, and analytics. DV creates transparency, eliminates fraud, and , sells an important insurance-like product known as “ad verification” designed to help optimize ad spend. Ad verification has reached a stage of widespread acceptance among digital ad buyers due to its measurable low cost/high reward value proposition. DV operates as a duopoly and enjoys a leading position in the market (more than 50% market share) by focusing on product innovation rather than sales expansion. DV’s business should continue to benefit from secular tailwinds in digital advertising. Given the high cash margins and minimal capital investment needs, incremental growth in revenue should enhance return on capital. We initiated a position after the decline and were able to acquire a favorable company that was growing at double digit growth rates, high margins and market multiples. ”
Overall DV ranks No. 8 on our list of 8 worst-performing technology stocks for 2024. While we acknowledge the potential of DV as an investment, our belief is that AI stocks are more likely to deliver higher returns and do so in the short term. time frame. If you’re looking for more promising AI stocks than DV, check out our report on the cheapest AI stocks.
Read next: BlackRock’s 8 Best Widemot Stocks to Buy Now and 30 Most Important AI Stocks.
Disclosure: None. This article was originally published on Insider Monkey.
