Nine stocks in the Nasdaq-100 have dropped 15% or more during October

By Philip van Doorn

The hardest-hit stocks include Tesla and Lucid Group, with a big surprise from Align Technology, which plunged 25% on Thursday.

The Nasdaq Composite Index is in the midst of a correction. A close look at its Nasdaq-100 subset shows 20 of those stocks fell 10% or more for one week through Wednesday's close.

The Nasdaq Composite Index COMP fell into a correction on Wednesday, being down more than 10% from its last peak set in July. On Thursday, the index declined another 1.8%. It is still up 20.3% for 2023, following a 33.1% decline during 2022. From the end of 2021, the Nasdaq is still down 18%. (All price changes in this article exclude dividends.)

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The Nasdaq-100 Index NDX is made up of the largest 100 nonfinancial companies in the full Nasdaq, weighted by market capitalization. It is tracked by the Invesco QQQ Trust ETF QQQ. This index declined 1.9% on Thursday, led by Align Technology Inc. (ALGN), which provides devices and systems used by orthodontists and dentists. The company's shares dropped 25% on Thursday, after its quarterly sales and earnings came in well below analysts' expectations, amid a decline in demand for its services.

A higher-than-expected third-quarter U.S. GDP growth pace of 4.9% may have helped feed the day's stock-market declines.

The Nasdaq-100 Index has risen 29% this year, reflecting its heavy weighting to Apple Inc. (AAPL) and Microsoft Corp. (MSFT), which together make up about 21% of the index's weighting.

Shares of Apple have risen 28% this year through Thursday, while Microsoft is up 37%.

The Nasdaq-100's partial recovery this year follows a 33% decline in 2022; it is down 11.9% from the end of 2021.

Here is a list of the nine stocks in the Nasdaq-100 that have fallen 15% or more this month, with additional price-change and valuation information:

   Company                                    Price change since Sept. 29  Oct. 26 price change  2023 price change  Price change since end of 2021  Forward P/E  Forward P/E at end of 2021 
   Align Technology Inc.                                           -37.6%                -24.9%               -10%                            -71%         20.7                        48.7 
   Lucid Group Inc.                                                -27.2%                 -2.4%               -40%                            -89%          N/A                         N/A 
   Moderna Inc.                                                    -26.4%                 -1.0%               -58%                            -70%          N/A                         9.3 
   Enphase Energy Inc.                                             -20.0%                  1.9%               -64%                            -47%         16.3                        60.1 
   Illumina Inc.                                                   -18.7%                 -2.0%               -45%                            -71%         57.5                        90.2 
   Tesla Inc.                                                      -17.8%                 -3.1%                67%                            -42%         54.0                       120.3 
   Airbnb Inc. Class A                                             -15.8%                 -2.6%                35%                            -31%         27.0                       166.7 
   Trade Desk Inc. Class A                                         -15.3%                 -7.6%                48%                            -28%         46.9                       100.3 
   Zoom Video Communications Inc. Class A                          -14.9%                 -1.4%               -12%                            -68%         13.0                        41.7 
                                                                                                                                                                            Source: FactSet 

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The table includes current forward price-to-earnings ratios, based on consensus estimates for the next 12 months among analysts polled by FactSet. In comparison, the weighted forward P/E for the Nasdaq-100 Index is 23.7, down from 30.4 at the end of 2021. For another comparison, the S&P 500 SPX trades for 17.4 times its weighted forward earnings estimate, down from a P/E of 21.6 at the end of 2021.

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-Philip van Doorn

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10-26-23 1715ET

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