Growth Stocks Are Down Bigly. How To Play The 2025 Shake-Up

NEW YORK, NEW YORK - SEPTEMBER 23: Traders work on the floor of the New York Stock Exchange during ... [+] morning trading on September 23, 2024 in New York City. Javier Milei, President of Argentina, rang the opening bell to recognize the 79th Session of the United Nations General Assembly as stocks opened up slightly up to start the week. (Photo by Michael M. Santiago/Getty Images)
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Growth Stocks Are Down Bigly
2025 has been a tough year for growth stocks. The Nasdaq 100 is home to many of the stock market’s biggest growth stock. The so-called magnificent 7 stocks reside in the Nasdaq 100 and we see so many other powerful leading stocks reside in that index. I was surprised to see that as of Friday’s close, approximately 17% of the Nasdaq 100 stocks are down double digits in 2025!
Here are some of the laggards in the Nasdaq 100:
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Charts & Data Courtesy of MarketSurge Inc.
As you can see there are a lot of stocks that are down bigly in 2025!
That means a defensive stance is warranted until the action improves.
What’s going on?
Naturally, investors are asking What’s Going On? Is the growth stock party over?
Only time will tell but for now, we know that growth stocks are under pressure and the party’s cooling off fast. AI was a big driver of the recent rally and AI stocks have been under pressure recently. Other growth areas, that were up big earlier in the month, are also selling off such as: robotic, drone, quantum computing, nuclear, semiconductor, and other growth stocks.
Hype’s a Killer: When the Story Fades
Growth stocks can rally sharply and enjoy tremdnous moves when the story - and institutional demand- is strong. Returns in growth stock can be mind boggling. That said, when the story fades, look out below. Trade Desk is a good example of a growth stock that can turn ugly, fast. Tesla is another good example of growth stock that nearly doubled since the election only to erase all the post election gains in a few short weeks.
Big Lesson = Be Patient In The Market, Don’t Chase Stocks.
I’ve seen it a million times—investors chase stocks, throw caution at the wind, think “this time is different" only to see the stock fall hard after they part is over. Many investors experience FOMO (Fear Of Missing Out) and buy stocks just to say they own XYZ. Right now, approximately 17% of the Nasdaq 100 is down double digits, the market is speaking loud and clear: when the hype ends, the story stumbles, and there’s no meat on the bone, investors can lose a lot of money. Defense is first in my world because it protects both our mental and physical capital in all market environments.