After a calamitous plummet in 2022, the Nasdaq Composite all defied odds in 2023 and remains on a steadfast rally in 2024. The tech-heavy index has climbed 14.4% as of the end of last Friday’s trading session. The artificial intelligence “craze” as well as robust earnings reports from a host of companies inspire confidence in investors, despite there still being clouds of uncertainty in the global macroeconomic environment. As a result, there are some Nasdaq stocks to sell this June.
What will drive Nasdaq returns going forward will be United States macroeconomic data that consistently point to decreasing inflationary pressure. A stronger-than-expected jobs report for the month of May, which noted 272,000 expansion in nonfarm payrolls, jittered markets late last week and caused many traders to significantly scale back their rate cut bets.
More volatility is quite possible in the coming weeks, and Nasdaq-listed stocks that are already performing poorly could feel the brunt of any downward swings. Below are 3 of which to avoid or sell in June.
Dropbox (DBX)
Dropbox (NASDAQ:DBX) is a cloud-based storage hosting site through which private businesses, families, and individuals can share files or collaborate on content. Additional products and deep integrations with Microsoft (NASDAQ:MSFT), Zoom (NASDAQ:ZM), and Salesforce (NASDAQ:CRM) have allowed have endowed organizations and content creators with a suite of useful tools and functionalities. In the middle of last year, the content-sharing platform unveiled the Dropbox AI and Dropbox Dashboard. The former is able to summarize content and pull useful information from large documents, while the latter connects all the important tools and content of the user via an AI-powered search bar.
While these new features helped Dropbox shares to rally 31.7% in 2023, unfortunately, not everything has been rosy for the platform’s share price in the current year. DBX has plummeted 27.3% on a YTD basis; the sell-off precipitated after a year-over-year decline in ARR that the Dropbox reported in their Q4’2023 earnings report. A decline in ARR probably incited doubt about the demand for the company’s solutions, despite being AI-powered.
A better-than-expected Q1 report has not revived the stock either, leaving many investors with one choice: take their losses and sell.
Sprout Social (SPT)
Social media has become a key channel through businesses market products and communicate with their customers. Because there is a plethora of social media platforms that companies can leverage, it’s probably useful to have a single pane of glass through which a company can assess the metrics of each platform. That’s where the software firm Sprout Social (NASDAQ:SPT) is supposed to come into play. Sprout Social strives to “democratize business intelligence” through the provision of immediate access to social media analytics, competitive insights, and trends across various consumer markets.
Slowing sales growth has recently led to a sharp plummet in the platform’s share price. For their Q1’2024 earnings print, Sprout Social reported revenue of $96.8 million, while Wall Street analysts were expecting slightly more. Year-over-year growth came in at 28.7%, but growth had noticeably slowed down from where it was during the same quarter of 2023. Sprout Social expects Q2 revenue growth to also decelerate from last year.
SPT’s share price has fallen 45.1% on a YTD basis, making it a stock to definitely sell in June if you’re still holding on to it. You can see why we added this to our list of Nasdaq stocks to sell.
MaxLinear (MXL)
MaxLinear (NASDAQ:MXL) provides communications systems-on-a-chip (SoCs) to telecom and communications original equipment manufacturers (OEMs). The firm’s products include various electronic devices, such as radio transceivers and 4G/5G modems, optical transceivers for data centers, and Wi-Fi routers for networks. MaxLinear experienced robust sales growth in 2020 and 2021 (e.g., the pandemic years) as many citizens demanded had to work-from-home, effectively driving up demand for internet services.
However, high inventory levels at telecom providers have led to waning demand for new products from their suppliers. For 2023, MaxLinear saw revenues decline year-over-year by 38% to $693.3 million. First quarter earnings results for the current calendar year were also disappointing: net revenue declined 62% on a year-over-year basis, while GAAP gross margins compressed 300 basis points to 51.7%.
MaxLinear’s share price is down 27.6% for the year. While the company hopes for revenues to pick up throughout the rest of 2024, investors probably shouldn’t bet on a miracle turnaround. Make sure you drop these Nasdaq stocks to sell.
On the date of publication, Tyrik Torres did not have (either directly or indirectly) any 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.