Investors might find opportunities in the wreckage.
When stocks drop sharply over a short period, investors can sometimes find great deals. While a precipitous drop can mean the firm is facing some major issues, it can also mean that some short-term concerns caused the sell-off, but the fundamentals are still strong. It’s with those types of stocks that investors can find opportunities among the wreckage.
With that said, here are the 4 worst performing large cap stocks in August.
- Figma, down 39.2%
- , down 37.1%
- , down 29.6%
- Circle Internet Group, down 28.1%
Two Recent IPOs Tank
Two of the four worst stocks in August were recent IPOs. Figma is a technology company that allows users to design websites, mobile apps, and other digital products through its AI-enabled platform. It went public on July 31 with an IPO price of $33 per share.
There was way too much exuberance for this promising company, which has grown to 13 million users and some 450,000 customers since it launched in 2012. The stock price soared in the first days of trading to a high of $142 per share, closing after day one on August 1 at $122 per share.
That’s just not sustainable and the stock settled back down to $68 per share — a nearly 40% drop. Figma could be one to keep an eye on, but in August it was a victim of its own IPO.
It’s a similar story with Circle Internet Group, which went public in early June. There was a lot of hype around this company as it owns USD Coin, a stablecoin pegged to the US dollar. It also runs the Circle Payments Network to facilitate the settlement of stablecoins. After Congress passed the GENIUS Act to establish a framework for stablecoins, Circle stock took off, from an IPO price of $31 per share to a ridiculous high of $298 per share.
It sank after the initial euphoria to its current $130 per share, but it is still up some 89% since its IPO. This is also a stock to keep an eye on, just wait for the price to settle and look for more earnings visibility.
Trade Desk and Supermicro Fall on Outlooks
The Trade Desk provides clients with a cloud-based advertising platform where they can manage digital ad campaigns. The stock has struggled this year, down about 54% YTD. The August sell-off was mainly due to its weaker than expected outlook for Q3, which may be impacted by tariffs, as customers are hesitant to spend on ads because of higher costs.
Super Micro Computer also tanked in August after missing earnings and revenue estimates, and having weaker guidance than expected.
But investors should keep an eye on Supermicro. It is cheap, trading at 15 times forward earnings, and as a provider of servers and data storage for data centers and cloud computing, it is in a high-growth business.