Key Points
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Despite a positive month for the overall stock market, a few laggards stood out with disapointing losses.
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Three companies lost 23.5% of their value or worse in August.
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Sometimes, heavy losses are an opportunity to buy great stocks at a discount.
Ups and downs related to tariff threats and a potential interest rate reduction made August a positive month overall for the stock market. From the end of July through the closing bell on Aug. 29, the benchmark S&P 500 (SNPINDEX: ^GSPC) index gained 1.9%
It was a positive month overall, but not for all members of the S&P 500. The three worst-performing stocks in the index sank by 23.5% or more during August.
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|
Company Name (Symbol) |
Stock Performance in August 2025 |
|---|---|
|
The Trade Desk (NASDAQ: TTD) |
(36.5%) |
|
Super Micro Computer (NASDAQ: SMCI) |
(26.7%) |
|
Gartner (NYSE: IT) |
(23.5%) |
Data source: Google Finance.
Before you think about scooping them up on the dip, let’s look at what weighed them down.
Image source: Getty Images.
1. The Trade Desk
Shares of programmatic advertising specialist, The Trade Desk, dropped 39% in a single trading session after reporting second-quarter results on Aug. 7. Total second-quarter revenue, which grew 19% year over year, wasn’t anything to complain about, but it did represent a growth deceleration. Investors fearing further deceleration knocked the stock 36.5% lower last month.
In addition to the reported sales growth deceleration, investors were upset by the company’s forward outlook. The Trade Desk told investors to expect revenue of at least $717 million in the third quarter. The estimate implies a gain of just 14% year over year. That isn’t necessarily bad, but it represents a significant deceleration at a time when its integrated peers are reporting gains.
Investors are viewing the forecasted slowdown as evidence that The Trade Desk can’t compete with Amazon‘s growing ad business. While Prime Video and the live sports it has access to are attractive features, Amazon has a vested interest in promoting its own digital real estate. As an independent platform, The Trade Desk could continue attracting advertisers who won’t accept the conflict of interest.
2. Super Micro Computer
Shares of artificial intelligence (AI) server manufacturer Super Micro Computer tanked more than 20% on Aug. 5 after the company released results for its fiscal fourth quarter that ended on June 30. By the end of the month, the stock was down 26.7%.
Supermicro reported sales that grew just 7.4% year over year to $5.8 billion. On the bottom line, net income contracted from $297 million in the previous year period to just $195 million this year.
While the sales contraction was disappointing, it was management’s forward outlook revision that upset investors the most. For fiscal 2026, management is predicting $33 billion in total revenue, which works out to a 50% gain year over year.
Achieving $33 billion in annual revenue wouldn’t be anything to complain about if management hadn’t told us to expect $40 billion just six months earlier. To make matters more troubling, Supermicro’s gross margin contracted down to 9.5% from 10.2% in the previous year period.
Building servers has traditionally been a low-margin business. It’s probably a good idea to keep this stock in a watchlist until we see a return to growth, widening profit margins, or a little of both.
3. Gartner
While Supermicro fell in response to slackening demand for AI servers, Gartner’s stock tanked because investors are assuming that new AI tools available to all of us are making enterprise-level subscriptions to its services obsolete.
On Aug. 5, Gartner reported global contract value that grew just 4.9% year over year to $5.0 billion. Two years earlier, the company reported global contract value that grew 8.9% year over year.
To combat the proliferation of general-use AI tools that cost just a few hundred dollars per year per seat, Gartner has begun rolling out its own AI application for enterprise clients. With access to Gartner insights that publicly available applications lack, the AskGartner tool could go a long way toward retaining clients.
According to Gartner, AskGartner is off to a terrific start. Individual investors would do well to wait at least a couple of quarters to make sure it can stop general AI usage trends from eating away at its business model.
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Cory Renauer has positions in The Trade Desk. The Motley Fool has positions in and recommends The Trade Desk. The Motley Fool recommends Gartner. The Motley Fool has a disclosure policy.