Over the last several months, many stocks that were once among the market's most prized darlings have taken significant hits. Various circumstances and events, like DeepSeek, trade wars, and rising valuation concerns, have led to these big drawdowns. In 2025, the market has hit the technology and consumer discretionary sectors particularly hard.
Both rank in the bottom three in sector performance as of the May 23 close.
Unsurprisingly, two of the names on this list of once-soaring stocks that are down 50% or more from their 52-week highs are in these sectors. The other is a once red-hot communication services stock that has significant tech and consumer discretionary drivers.
Below are the details on these three names looking to return to their former glory. Unless otherwise indicated, all data points use information as of the May 23 close.
Could Marvell’s Broadcom-Like Recovery Be Coming?
First up is the AI-driven chip stock Marvell Technology (NASDAQ: MRVL). Marvell is often compared to its massively larger rival, Broadcom (NASDAQ: AVGO). This is because both companies are deeply involved in the custom semiconductor space. They design chips that help meet very specific needs for a particular customer.
[content-module:Forecast|NASDAQ: MRVL]Marvell reached its all-time high on Jan. 23, 2025. From the beginning of 2023 to that point, Marvell shares provided a staggering total return of around 243%.
However, things took a turn for the worse soon after.
Marvell shares dropped over 19% in one day on Jan. 27 in reaction to the DeepSeek revelations coming out of China. Generalized market fears and trade war escalation set the stock on a nearly straight down path once February began.
Now, Marvell shares are down approximately 52% from their 52-week high. Marvell’s forward price-to-earnings (P/E) ratio has more than halved, dropping from nearly 49x to just under 22x. This figure now sits very solidly below Broadcom’s 33x, after being significantly higher than Broadcom’s forward P/E prior.
Marvell shares have yet to recover robustly like Broadcom. So far during Q2, Marvell shares are down slightly, while Broadcom’s are up nearly 37%.
This sets up the potential for Marvell to outperform Broadcom going forward.
Reddit Is Down Over 55% After Incredible Post-IPO Run
Next up is the communications stock that somewhat sits between sectors, Reddit (NYSE: RDDT). Its users, who are consumers, drive the platform, and it leverages technology to monetize their engagement. During 2024, Reddit was among the most high-flying stocks in the market.
[content-module:Forecast|NYSE: RDDT]After the firm’s initial public offering (IPO) in May 2024, the stock reached an all-time high on Feb. 10, 2025. Over that period, the stock rose by over 340%. However, since that high, shares are down by 56%.
The stock really started to slide just days after due to reporting slower-than-expected user growth in Q4 2024. For stocks that have appreciated so much in such little time, missing these estimates can create huge downward momentum.
Changes to Google parent company Alphabet’s (NASDAQ: GOOGL) search algorithm and added AI search features have also raised significant concerns that less traffic will go to Reddit in the future.
Still, analysts see significant upside in Reddit shares. Among those tracked by MarketBeat that updated their price targets in May, the average target is around $150. This indicates about 49% upside in shares.
Analysts Warm Up to CAVA, See +40% Upside
Last up is CAVA Group (NYSE: CAVA). Since going public in June 2023, CAVA rose to an all-time high of over $173, gaining approximately 312%. CAVA reached this high during intraday trading on Nov. 13, although the stock closed at around $147 that day.
[content-module:Forecast|NYSE: CAVA]Still, from that intraday high, shares of CAVA are down nearly 52%. Analysts issued multiple substantial downgrades that hit the stock hard in February after it reported Q4 2024 results, causing shares to drop big-time. Macroeconomic and consumer spending fears have also weighed on the stock.
The company’s Q2 results, reported on May 15, seem to have inspired more confidence on Wall Street. Several analysts tracked by MarketBeat raised their price targets afterward. The average of these new targets sits just under $118, implying 41% upside in shares.
Overall, the huge decline in these stocks indicates that there could be substantial room for recovery going forward.
Marvell’s lack of recovery compared to Broadcom is particularly interesting. The company’s May 29 earnings release allows it to follow in Broadcom’s footsteps and prove its business remains strong. Still, the company must deliver impressive results and commentary to stop its slide.
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