Delving into the world of artificial intelligence, we can spot a trend that many once-acclaimed AI stocks no longer hold their lucrative allure. In the preceding biennium, AI was heralded as an epoch-making technology, with investors betting high on its potential to revolutionize global operations. This enthusiasm led to record-breaking performances for companies actively investing in AI. Some companies even saw an increase in earnings by triple-digit percentages in mere two years.
However, as we countdown to 2025, the AI-driven bullish race seems to decelerate. Following the commencement of 2025, it appeared that AI stocks had cumulatively shed approximately $1 trillion in their market value. The reason? Chinese companies led by DeepSeek demonstrated superior advancements in AI R&D, upsetting previously U.S-dominated AI development. This unprecedented development caused major U.S market indices to recede from their all-time highs, triggering some to tumble into bearish territories.
Investor worries were rife that AI stocks might have outpaced their fundamental values. Particularly nerve-racking was the fate of semiconductor stocks, as investors grew skeptical about their ability to attract significant budgets. This apprehension resulted from DeepSeek’s ability to develop formidable AI models, without straining financial resources. Experiencing a market value plunge over 20%, certain AI stocks have since struggled to recuperate their losses.
The expectation was that the DeepSeek development would impede the funding towards cloud infrastructure and AI advancement. To everyone’s surprise, that axiom has not held true. Conversely, recent earnings from leading tech conglomerates and prominent AI stocks allude to a reviving trend in AI. They suggest that the downturn experienced earlier may have concluded even before sparking widespread concern.
Giordano Albertazzi, the CEO of the Ohio-based data center provider – Vertiv, echoed this sentiment, ‘Our projections show an escalating trend of AI deployments across the data center market. Sturdy demand indications validate our forecasts for both immediate and extended growth.’
Reassurances from US tech giants signal the strength of the data center market. Their commitment to allocating finances for building AI infrastructure highlights the long-term scope of this growing field. John Carrafiell, the Co-CEO of BGO (a globally recognized real estate investment manager), shares this perspective. He points out that the key players are not retreating but plan to invest over $300 billion in Capex this year for AI infrastructure.
Carrafiell dismisses the notion of an upcoming bust, framing the current situation as a sector-wide reshuffle under limited and strategic resources like power, fiber, water, and land. He asserts, ‘This is not the end, it’s just the beginning. Continued acceptance from enterprises will amplify AI and data center requirements throughout the upcoming decade.’
Despite these optimistic forecasts, not all AI stocks have managed to recover from the steep losses incurred at the start of the year. The reality stands that while some shares did beginners to rebound, several remaining well-known AI stocks continue to struggle, facing an undetermined future. They are nursing double-digit percentage losses in the market for the year to date.
A methodical examination was conducted by sifting through Finviz and various online lists to compile a list of the 10 most struggling AI stocks. Each of these stocks has seen a decrease of more than 10% (as of May 13) and have been trailing behind the S&P 500, currently up by about 4.92% YTD. The study aimed to analyze why these stocks are dwindling and identify contributing factors to their notable YTD losses.
The rankings ordered the stocks based on their year-to-date losses. The list starts with Advanced Micro Devices, Inc. (NASDAQ:AMD), a reputable semiconductor firm known for designing and manufacturing processors, graphics processors, and other computer components, with a YTD loss of -10.12%. The firm is facing pressures primarily due to concerns over the sustainability of its China AI business and intensified competition.
Next on the list is Adobe Inc. (NASDAQ:ADBE) with a YTD loss of -10.45%. Adobe Inc. offers a variety of products and services facilitating content creation, publication, and promotion, powered by its flagship product, the Creative Cloud. Adobe Inc’s performance has been less than stellar primarily because of concerns regarding the company’s lag in generative AI and AI monetization issues.
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