This year will surely go down in the history books as the year of tech stocks, thanks to advances like generative artificial intelligence that are pushing the market to new highs. But for all the amazing tech stocks available today, there are also some truly terrible tech stocks that investors should avoid.
The names on this list are disappointing, and investing in such struggling tech stocks would be a huge mistake. Some of them are good companies that are just losing to better competition, and others are saddled with products that don’t resonate in today’s market.
I’m using the Portfolio Grader to identify some of the worst tech stocks today based on factors such as earnings performance, growth (or lack thereof), and analyst ratings. We’re also considering market momentum, which can sometimes be an overlooked factor when evaluating stocks.
Stocks with weak momentum tend to be viewed negatively by the market, as the poor sentiment makes it harder for them to attract capital or generate investor enthusiasm. Momentum problems can lead to a cycle of poor performance, trapping the company and its investors into a money-losing proposition.
Investors would do well to identify tech stocks to avoid and instead put their hard-earned money into equities with a better chance of outperforming indexes like the tech-heavy Nasdaq composite.
Intel (INTC)
While many other tech stocks with an emphasis on AI are taking off this year, Intel (NASDAQ:INTC) is moving in the opposite direction.
Shares are down significantly this year, and I think it’s fair to question whether Intel is in jeopardy of losing its coveted spot in the Dow Jones Industrial Average.
Granted, Intel is showing signs of life with a modest rally this month. However, Mizuho analyst Jordan Klein speculates that’s more from short covering rather than increased confidence in Intel’s prospects.
Intel is at a tremendous disadvantage in the AI race. It rolled out its Gaudi 3 Accelerator chip hoping to compete with Nvidia (NASDAQ:NVDA) and its H100 chip, but Nvidia has already moved on to the Blackwell platform and will surely retain its superiority over Intel.
Intel is also trying to get into the foundry business to make semiconductors for other companies, but Taiwan Semiconductor Manufacturing (NYSE:TSM) has the lion’s share of that business locked up.
INTC stock is down 33% this year and gets a “D” rating in the Portfolio Grader.
Snowflake (SNOW)
Snowflake (NYSE:SNOW) is a cloud computing company that provides cloud-based data storage and analytics, operating under a “data-as-a-service” model.
The company’s AI Data Cloud allows its customers to share data, build applications and improve their businesses with AI.
Shares are down, however, in part because of data breach — which is a serious issue for any company like Snowflake that processes to be an expert in working in cloud environments.
The issues involves from Snowflake allowing customers to set up accounts using single-factor authentication instead of the more secure multifactor authentication protocol.
So, despite Snowflake increasing its revenue in the first quarter of fiscal 2025 by 34% to $789.6 million, investors are souring on SNOW stock.
Snowflake stock is down 30% in 2024 and gets a “D” rating in the Portfolio Grader.
SolarEdge Technologies (SEDG)
SolarEdge Technologies (NASDAQ:SEDG), as you can probably deduce from the name, operates in the solar energy space. The company makes power optimizers and inverters that help solar panels operate more efficiently.
But the solar industry has been tough for the last couple of years. Higher labor costs, inflated interest rates, and regulatory changes have weighed on the industry. Potential customers aren’t willing to borrow money to install solar panels while interest rates remain high, and the Fed has so far resisted a rate cut even though inflation has slowed.
In June, the stock took another tumble when SolarEdge disclosed that one of its customers. PM&M Electric, filed for Chapter 7 bankruptcy protection The company owes SolarEdge $11.4 million, and there’s no guarantee that SolarEdge will ever see that money now.
Earnings for the first quarter showed revenue of $204.4 million, down a whopping 78% from a year ago. The company posted a loss of $26.1 million for the quarter, versus a profit of $300 million in the same quarter a year ago.
SEDG stock is down 68% in 2024 and gets an “F” rating in the Portfolio Grader.
UiPath (PATH)
UiPath (NYSE:PATH) makes robotic process automation software, which allows customers to automate repetitive tasks — ideally improving productivity.
And like many other companies, it’s rolling out generative AI-powered features to make its products easier to use. UiPath’s AI products help developers build products, write code, perform quality checks and provide real-time insights.
The company reported solid earnings for the first quarter of fiscal 2025 — revenue of $335.11 million and adjusted earnings per share of 13 cents beat analysts’ estimates on the top and bottom lines.
But even with that report, PATH stock fell because the company announced the CEO Rob Enslin was stepping down, and was replaced by the company’s former CEO, Daniel Dines. Shares fell 30% on the news.
For the year, PATH stock has been down 50% and has gotten a “D” rating in the Portfolio Grader.
Stem (STEM)
Stem (NYSE:STEM) is a California company using AI to provide clean energy solutions and services. Its platform is designed to help customers manage scaled energy assets and portfolios more efficiently. The company works with solar, storage, and electric vehicle charging companies.
Revenue in the first quarter was $25.5 million, down from $67.4 million in the same quarter a year ago. The company incurred a $33 million noncash adjustment due to adjusted estimates of contract guarantees issued in 2022 and 2023.
Bookings dropped significantly, from $363.5 million a year ago to $23.8 million in the first quarter. Stem attributed the drop to a shift in strategy to pursue large, utility-scale projects. But notably, the company lowered its full-year revenue guidance to a range of $567 million to $667 million in revenue from a range of $600 million to $700 million.
STEM stock is down 67% in 2024 and gets an “F” rating in the Portfolio Grader.
Interactive Strength (TRNR)
Interactive Strength (NASDAQ:TRNR) is a struggling tech stock that recently executed a reverse 1-for-40 reverse stock split to keep the stock price over $1 per share and avoid delisting.
But investors always see through high-jinks like that, and TRNR stock is already back to 70 cents per share even following the reverse split.
Interactive Strength is a Texas-based tech company that provides fitness equipment and virtual training. It has three platforms: Climbr, which includes vertical climbing machines for full-body workouts; Forme, an interactive home gym, and Forme Golf, which is a golf training platform.
Revenue in the first quarter was $363,000, up from $157,000 a year ago. But the company posted a loss of $11.3 million for the quarter.
TRNR stock is likely to continue to drop. The stock is down 97% this year and gets a “D” rating in the Portfolio Grader.
Professional Diversity Network (IPDN)
Professional Diversity Network (NASDAQ:IPDN) is the smallest company on the list, with a market cap of just over $5 million. It serves as a job board and resource for companies seeking to diversify their workforces, including employees who are disabled, veterans, LGBTQA+, or people of color.
Diversity, equity and inclusion practices has been a hot topic for many corporations, and some states are beginning to ban DEI initiatives. The Supreme Court also issued a ruling earlier this year that raised new questions about if DEI practices will be considered legal.
Amid that backdrop, an investment in IPDN appears to be a risky bet.
Revenue in the first quarter was $1.72 million, down 12% from a year ago. The company posted a net loss for the quarter of $803,000 and 7 cents per share.
IPDN stock is down 76% this year and gets a “D” rating in the Portfolio Grader.
On the date of publication, Louis Navellier had LONG position in NVDA. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.
The InvestorPlace Research Staff member primarily responsible for this article had a LONG position in NVDA. The InvestorPlace Research Staff member did not have (either directly or indirectly) any other positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) and positions in the securities mentioned in this article.