Including growth stocks within your investment portfolio is one of the best ways you can build wealth over the long term.
However, from time to time, such stocks may experience a sharp plunge because of weak earnings, poor guidance, or negative news flow.
Investors can keep a lookout for such stocks to determine if they may represent a great buying opportunity to accumulate shares on the cheap.
Here are three growth stocks that crashed hard this year and may offer a tantalising investment opportunity.
Intel (NASDAQ: INTC)
Intel designs, manufactures, and sells computer components and related products while working to advance the design and manufacture of semiconductors to address their customers’ needs.
On 2 August, Intel saw its share price crash by 26.1% to end at US$21.48, registering its largest one-day fall since 1974.
Shares of the technology company have plunged by nearly 59% year-to-date and are trading near their 52-week low of US$19.29.
The chipmaker reported a big miss against analysts’ expectations when it reported its latest second quarter of 2024 (2Q 2024) earnings.
The company also announced that it would lay off more than 15% of its headcount.
To make matters worse, Intel also suspended its dividend payments starting from 4Q 2024.
For 2Q 2024, Intel saw revenue dip by 1% year on year to US$12.8 billion.
Because of higher restructuring charges, the company reported an operating loss of US$2 billion and a net loss of US$1.6 billion.
This performance was a far cry from the previous year’s results which saw a US$1.5 billion net profit.
Analysts were also expecting an adjusted earnings per share (EPS) of US$0.10 but Intel delivered just US$0.02 of EPS.
Intel’s CEO, Pat Gelsinger, remarked that the restructuring plan that was announced represents the company’s most comprehensive in the last four decades.
This plan will focus on four key priorities – reduce operating expenses, reduce capital expenditures, reduce cost of sales, and maintain core investments to execute its strategy.
Intel forecasted revenue of between US$12.5 billion to US$13.5 billion for its 3Q 2024.
At the mid-point, this represents an 8.5% year-on-year decline from 3Q 2023’s revenue of US$14.2 billion.
Investors may need to wait till Intel’s restructuring plan gains traction in 2025 before they can see an improvement in its financials.
Symbiotic Inc (NASDAQ: SYM)
Symbiotic is an automation technology company that helps to improve and revamp supply chains using its artificial intelligence (AI) powered robotic and software platform.
Shares of the company plunged 23.5% on 30 July to US$27.25 after it released its financial results for the third quarter of fiscal 2024 (3Q FY2024) ending 29 June 2024.
Symbiotic’s share price has more than halved year-to-date to US$22.92, close to its 52-week low of US$21.11.
For 3Q FY2024, the company reported revenue of US$491.9 million, representing a jump of 57.7% year on year.
The business posted a small net loss of US$2.5 million when analysts were expecting a breakeven quarter.
However, it was Symbiotic’s guidance for 4Q FY2024 that got investors worried.
The company expects revenue to come in between US$455 million and US$475 million.
The mid-point of this range (US$465 million) means that revenue for 4Q FY2024 would have grown by just 18.7% year on year, a sharp deceleration from the 57.7% recorded in 3Q FY2024.
Despite the weaker guidance, investors should note that the business continues to demonstrate healthy top-line growth.
Symbiotic also generated a positive free cash flow of US$33.2 million for 3Q FY2024, although this was lower than the prior year’s US$46.5 million.
Snowflake (NYSE: SNOW)
Snowflake runs a data cloud that allows customers to unite siloed data to share it, power applications and conduct analyses.
The company helps to collate data from different clouds, geographies, and industries to help its customers draw insights.
Back at the end of February, the company announced its fourth quarter of fiscal 2024 (4Q FY2024) earnings and provided guidance that underwhelmed investors.
Snowflake also announced that CEO Frank Slootman will retire and be replaced by Sridhar Ramaswamy, the former advertising chief of Google.
Investors promptly sold down Snowflakes shares, sending them diving by 18% within a day to US$188.28.
Shares have continued their steady decline and recently hit their 52-week low of US$107.93 and are down nearly 40% year-to-date.
Snowflake reported a 33% year-on-year increase in revenue for 4Q FY2024 at US$738.1 million but guided for revenue of between US$745 million to US$750 million for 1Q FY2025.
This represented growth of “only” 26% to 27% year on year and disappointed analysts.
The company surprised on the upside in late May by reporting revenue of US$789.6 million, above its guidance and up 34% year on year.
Snowflake once again guided for a 26% to 27% year-on-year growth in revenue for 2Q FY2025 at US$805 million to US$810 million.
For FY2025, the company expects revenue to hit US$3.3 billion for a 24% year-on-year increase.
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Disclosure: Royston Yang does not own shares in any of the companies mentioned.
