Investors in Cathie Wood’s ARK Innovation (NYSEARCA:ARKK) exchange-traded fund (ETF) had an excellent 2020, as the fund returned an incredible 148%. However, the same can’t be said for 2021, as the fund reversed course and has declined 25% year-t0-date (YTD). In fact, the fund is down 7% just today, at the time of writing.
With that said, let’s take a look at some of the ARKK ETF’s biggest losers this past year.
ARKK ETF Losers: Teladoc (TDOC)
Teladoc (NYSE:TDOC) takes second place in terms of portfolio weight in the ARKK ETF, falling second only to Tesla (NASDAQ:TSLA). The tele-healthcare provider peaked as high as $308 during February before collapsing 70% to today’s price of $91. Last year, Teladoc purchased Livongo for $18.5 billion in a blockbuster transaction. Now, the market capitalization of TDOC stock trades below its purchase price of Livongo, tallying in at $14.6 billion.
Is TDOC stock worth buying now? Investors may want to analyze tele-healthcare visits and the durability of Teladoc’s business model before making a purchase. However, there’s no question that Teladoc is trading at a discount compared to peak-Covid valuations.
Zoom Technologies (NASDAQ:ZM) led the pandemic as the bellwether of stay-at-home stocks. The video communications company increased by a staggering 400% during 2020. However, 2o21 is a completely different story, as Zoom has declined 48% thus far. ZM stock has experienced multiple compressions as investors weigh Microsoft (NASDAQ:MSFT) Teams taking market share and the trend of returning to the office.
With that said, Zoom’s revenue grew by 35% during Q3 and beat analysts’ expectations. The company is led by a competent CEO in Eric Yuan and will most likely continue to innovate, regardless of stock price.
ARKK ETF Losers: Spotify (SPOT)
Shares of Spotify Technology (NYSE:SPOT) have declined by 27% since the start of the year. The music-streaming provider peaked as high as $305 during November before falling 26% to today’s price of $226. Nonetheless, Spotify continues to sign deals with major artists, podcast hosts and celebrities.
Additionally, Spotify is ranked by CNET as the best music-streaming service, beating out Apple (NASDAQ:AAPL) Music and Amazon (NASDAQ:AMZN) Music. The demand for streaming music isn’t going away anytime soon, so investors may want to take a hard look at SPOT stock.
Reddit favorite Palantir Technologies (NYSE:PLTR) has helped lead ARKK ETF’s decline as well. The data-analytics company has lost 20% of its value since the year began due to concerns of slowing government and commercial sector growth.
On the other hand, Goldman Sachs still believes that PLTR stock is a buy with a $30 price target. Even with the risk of rates rising, Goldman is still confident because Palantir doesn’t solely trade on the value of future cash flows. Due to Palantir’s healthy cash flows today, the stock’s valuation isn’t entirely dependent on cash-flow estimates in the long term.
ARKK ETF Losers: Twitter (TWTR)
Investors in Twitter (NYSE:TWTR) stock seemed happy about Jack Dorsey’s resignation last month, but the stock has declined by 19% since his announcement. Even worse, TWTR stock has returned -23% YTD, compared to the S&P 500’s return of 22%.
While Jack Dorsey’s era may be over, all eyes are now on new CEO Parag Agrawal. After a flurry of disappointing features this year, such as Twitter Fleets and Twitter Blue, potential investors may want to focus on the future. Specifically, investors want to see increased ad revenue and a possible change to Twitter’s ad algorithm. Advertisements provide a major source of revenue for social media players, and Twitter still has a lot of work to do in that department.
On the date of publication, Eddie Pan 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.