Tech, Drugs, and Yoga Wear: These Stocks aren’t Doing so Hot

We’re halfway through the year, and we’ve got one question: Why are these particular stocks performing so poorly?

Recently, we looked at the top-performing companies on the S&P 500, and with the exception of the ever-reliable Berkshire Hathaway and pharmaceutical juggernaut Eli Lilly, it was all Big Tech riding the artificial intelligence wave. With six months down and six more to go, we thought we’d look at the opposite end of the spectrum and highlight the businesses at the bottom of America’s major indexes.

Something is Rotten in Santa Clara

If your business makes semiconductor chips — which power our electronics and are the key to developing advanced AI tools — you’re probably very happy right now. TSMC’s share price is up 80% year-to-date; meanwhile, it’s being courted by the White House and expanding its factory footprint in Arizona. Nvidia shot past $3 trillion in market cap and occasionally tops Microsoft and Apple as the largest company in the world. So it’s wild to see Intel — a pioneer in the sector — at the bottom of the Dow.

• Its first-quarter earnings, released in April, beat Wall Street’s expectations, but the company’s second-quarter forecast was less than stellar, and Intel’s stock has fallen 35% this year. Not only does the company need to dive deep into AI, but the transistors on its chips need to get smaller if it wants to stay relevant. 
• Intel hopes to get ahead of the competition with its Xeon 6 and Gaudi 3 processors, and it plans to work as an outsource manufacturer for other companies’ chips. CEO Patrick Gelsinger said Intel will be the world’s leading AI foundry by 2030. Let’s just hope investors can hold on for that long.

Index Indicator: Fashion line Lululemon and pharmacy chain Walgreens are at the bottom of both the S&P 500 and the Nasdaq 100, with their share prices plummeting 40% and 58%, respectively. 

The athletic apparel company’s comparable sales in the first quarter were flat year-over-year in the Americas, stoking fears that Lululemon is falling out of touch with its customers. CEO Calvin McDonald said it failed to offer as many sizes and colors as consumers wanted, but that the issue should be fixed for the second half of the year. And it’s not alone — Nike and Under Armour are hurting, too. Walgreens, meanwhile, followed many pharmacy chains by jumping into the medical care space after acquiring a controlling stake in clinic operator VillageMD, but that gamble led to a $6 billion write-down. Help doc, it hurts.