A new generation of futuristic, high-flying tech stocks has been cut down by roughly 60% from its highs. That is enough damage to start looking for opportunity — but not enough to make every stock a bargain.
“THE FUTURE IS ON SALE RIGHT NOW,” investor Shay Boloor wrote in a recent X post highlighting steep losses across companies tied to nuclear power, quantum computing, space, robotics, and artificial intelligence.
The group spans several of the market’s hottest long-term themes. Oklo (OKLO) is tied to advanced nuclear power, IonQ (IONQ) to quantum computing, Rocket Lab (RKLB) and AST SpaceMobile (ASTS) to space, and CoreWeave (CRWV) and SoundHound AI (SOUN) to the AI build-out.
Among 21 selected stocks, the median is down roughly 60% from its record high.
The hard part begins after the markdown.
A stock that is down 60% is not automatically 60% “off.” Anchoring can turn the old high into a false reference point, making today’s price look cheap even when that earlier valuation was built on expectations that no longer hold.
The recovery hurdle also grows much faster than the original loss, as this table shows.
A stock sitting 60% below its high must climb 150% merely to get back there.
The last generation of pandemic darlings shows how ugly that arithmetic can get. Peloton (PTON), Zoom (ZM), Roku (ROKU), DocuSign (DOCU), and Teladoc (TDOC) all suffered enormous declines from their pandemic-era highs. Across a 20-stock sample, the median stock eventually fell roughly 90%.
After first falling 50%, the median stock lost another 80% from that lower price. As an old Wall Street line puts it, a stock down 99% can still fall another 100% from there.
The comparison does not put a 90% target on today’s group. It shows how little the old high says about where the floor sits.
So what can turn a wrecked stock into a potential buy?
Look for revenue, backlog, customer adoption, margins, or free cash flow moving in the right direction. Then compare the valuation with the company’s own history and relevant peers. A price-to-sales ratio can help with companies that lack profits, though it says little about margins, debt, or financial strength.
Finally, look for the stock to stop making new lows, form a base, or reclaim a widely watched level such as its 50-day moving average.
As alluring as an “on sale” sign can be, improving fundamentals, a reset valuation, and stabilizing price action are what turn a markdown into an opportunity.
Jared Blikre is the global markets and data editor for Yahoo Finance. Follow him on X at @SPYJared or email him at jaredblikre@yahooinc.com.
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