We recently compiled a list of the 8 worst-performing technology stocks of 2024. In this article, we’ll take a look at how WEBTOON Entertainment Inc. (NASDAQ:WBTN) stands compared to other worst-performing technology 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%.
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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WEBTOON Entertainment Inc. (NASDAQ:WBTN) is a technology company that operates a storytelling platform that enables creators and users to discover, create and share new content. Since the company went public in mid-year, its market value has fallen more than 50%.
The South Korean search engine-powered online manga platform has hit the market hard, posting mixed financial results that raise concerns about its growth prospects. WEBTOON Entertainment Inc. (NASDAQ:WBTN)’s revenue for the second quarter was $321 million, a slight improvement from $320.7 million in the year-ago period. This was a huge miss considering the market had expected the company to generate sales of $340.8 million.
Despite the disappointing financial results, the company remains in a solid position for growth given its position in the webcomic market. Additionally, the company’s core business revolves around paid content and advertising, which should see strong growth as the macro economy improves due to lower interest rates.
A key competitive advantage in WEBTOON Entertainment Inc.’s (NASDAQ:WBTN) business strategy is its investment in content production and the platform’s ability to attract a wide range of creators. The company hopes to generate revenue from advertising and subscription models while engaging users in a variety of formats.
Overall, WBTN ranks 7th on our list of 8 worst-performing technology stocks in 2024. While we acknowledge WBTN’s potential as an investment, we believe 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 WBTN, 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.
