Wall Street’s 25 top losers: Onto Innovation, Globus Medical, Affirm dive as investors exit growth stocks

Wall Street experienced a sharp correction on May 9, 2025, with technology, healthcare, biotech, and fintech stocks dominating the U.S. Top Losers table. Out of the 25 most severely impacted companies, Onto Innovation Inc. saw the steepest fall of 30.21%, followed by Globus Medical Inc. with a 22.96% decline and Compass Inc. down 19.15%. The downturn reflects a broader investor retreat from high-growth equities amid mixed earnings results, tighter financial conditions, and rising bond yields.

The Nasdaq Composite dropped 1.8%, the S&P 500 fell 1.2%, and the Russell 2000 declined 2.5% as the Federal Reserve’s hawkish policy stance and inflation stickiness shifted investor focus toward defensive sectors and value stocks. This marks a reversal of the AI- and innovation-driven rally seen earlier in 2025 and aligns with sectoral rotation trends first observed in late Q1 when inflation data surprised to the upside.

Why Did Onto Innovation Stock Fall 30.21%?

Onto Innovation Inc. (NASDAQ: ONTO) shares plummeted to $88.50 after the semiconductor process control specialist missed both revenue and margin expectations in Q1 2025. Total revenue declined 13% year-on-year to approximately $165 million, significantly below consensus. The company’s management attributed the miss to a slump in wafer inspection equipment demand and weaker capex from Asian memory fabs, particularly in South Korea and Taiwan.

The company lowered its full-year revenue guidance from $720 million to $640 million and guided flat gross margins for the next two quarters. With a P/E ratio of 21.8 and a market capitalization of $4.32 billion, the stock has now shed over 60% from its 52-week high, eroding most of the AI rally gains seen earlier in the year. Institutional flows indicated significant outflows from semiconductor ETFs, with Vanguard and Fidelity funds reducing exposure.

Industry analysts noted that smaller cap semi-equipment firms like Onto remain disproportionately exposed to cyclical swings in foundry utilization rates and export control risks. The weakness follows similar cautionary signals from peers like Lam Research and Applied Materials.

Why Did Globus Medical Lose Nearly 23%?

Globus Medical Inc. (NYSE: GMED) closed at $55.82 after shedding $16.64. The stock was hit hard after the company reported a 7% sequential decline in spinal implant sales and flagged slower-than-expected integration synergies from its $3.1 billion NuVasive acquisition completed in late 2024.

Net revenue grew just 2.8% year-on-year to $277 million, falling short of expectations. Adjusted EBITDA margin narrowed by 320 basis points to 18.2%. The company cut its FY2025 EPS guidance by 12% and noted challenges in cross-selling due to overlapping product lines and hospital system consolidation.

The orthopedic devices industry has been under pressure due to delayed elective procedures and staffing shortages in U.S. hospitals. Several analysts from Raymond James and JP Morgan lowered their ratings, citing high execution risk and a valuation multiple (forward P/E: 74.4) that may no longer be supported by growth fundamentals.

Why Did Compass and Affirm Stocks Slide?

Compass Inc. (NYSE: COMP) declined 19.15% to $6.25, driven by investor concern over a slowdown in U.S. real estate transactions. While the company’s Q1 revenue rose 21% YoY to $1.16 billion, its customer acquisition costs rose sharply, with conversion rates deteriorating in high-rate metro markets like San Francisco and New York. Compass has gained over 50% YTD, but analysts now warn of margin headwinds as rates remain elevated.

Affirm Holdings Inc. (NASDAQ: AFRM) dropped 14.47% to $46.41. Despite growing gross merchandise volume (GMV) by 22% to $5.7 billion in Q1, its net loss widened to $180 million. The market punished the stock for rising delinquencies among subprime borrowers and a higher cost of funds due to credit tightening.

Affirm’s lack of a defined path to profitability and its exposure to consumer discretionary spending created additional concern, with hedge funds trimming exposure across BNPL names. Affirm is still up 45% in the past year, but institutional sentiment appears increasingly bearish on unprofitable fintech plays.

Which Other Stocks Were Among the Top Losers?

Rocket Lab USA Inc. (NASDAQ: RKLB) fell 11.21% to $20.51 after missing quarterly revenue targets and delaying its next Electron launch to late Q2. The company reported an operating loss of $47 million, despite a backlog of $550 million in satellite contracts. Investor sentiment cooled following multiple program delays, even as the stock remains up 393% over 12 months.

SoundHound AI Inc. (NASDAQ: SOUN) dropped 7.80% to $8.98 amid signs that revenue growth is not matching valuation expansion. Despite a 62.68% YTD gain, the voice AI specialist posted a larger-than-expected net loss of $34 million in Q1, as R&D expenses rose 28%.

Life Time Group Holdings Inc. (NYSE: LTH) fell 7.51% to $28.45, as its earnings revealed higher-than-expected churn and slower premium gym membership growth. While revenue increased 12% to $615 million, operating margins contracted due to rising SG&A and new facility launch costs.

Bruker Corporation (NASDAQ: BRKR) fell 7.38% on a weak outlook for scientific instruments sales in Europe. The company’s Q1 revenue of $568 million marked just 1.5% YoY growth. Foreign exchange headwinds and declining government research budgets were also cited.

Expedia Group Inc. (NASDAQ: EXPE) lost 7.30%, retreating to $156.66 after management warned of softer summer travel demand in Asia and Europe. Although Q1 revenue was up 8% YoY to $2.75 billion, margin pressure from higher ad spend and discounting concerns weighed on the outlook.

Were Biotech and Healthcare Stocks Also Affected?

Natera Inc. (NASDAQ: NTRA) declined 6.53% to $151.95 as Q1 revenues missed expectations at $293 million versus $300 million forecast. Investors grew cautious after slower-than-expected growth in its oncology liquid biopsy business.

Crinetics Pharmaceuticals Inc. (NASDAQ: CRNX) fell 6.18% amid pipeline delays and cash burn worries. The company reported a net loss of $64 million and reaffirmed its need for future funding rounds to sustain development beyond 2026.

Akero Therapeutics Inc. (NASDAQ: AKRO) declined 5.99% after trial enrollment issues were flagged in its lead NASH drug program. The market now awaits Phase 2b readout scheduled for late Q3 2025.

Institutional Sentiment and Flow Analysis

Across the 25 top declining stocks, institutional flow data pointed to significant rotation away from high-growth speculative names. ETF outflows were recorded in ARKK, IBB, QQQJ, and thematic fintech and biotech funds. Hedge funds reduced positions in AI, autonomous vehicles, and BNPL, citing rising capital costs and lack of earnings clarity.

Conversely, institutional inflows were noted in energy infrastructure, consumer staples, and industrial REITs—highlighting a continued pivot to yield and cash-flow-rich businesses.

What Lies Ahead for Growth Stocks?

The macro backdrop remains complex. While earnings season provided pockets of strength, the prevailing narrative has shifted from optimism about AI and tech innovation to caution over rates, inflation, and forward multiples. The Fed’s next policy meeting in June will be closely watched, especially with the 10-year Treasury yield now hovering above 4.60%.

Analysts expect further volatility in AI, biotech, and fintech segments as profit-taking accelerates and liquidity tightens. Stocks like Onto Innovation and Affirm may see additional price pressure unless supported by strong operational guidance or M&A prospects. Meanwhile, firms with sustainable free cash flow and sectoral tailwinds may outperform amid choppy conditions.