Our bottom 5 stocks for the first half of 2025 — and why we still own them

Despite market headwinds, the S&P 500 and Nasdaq Composite advanced 5.5% in H1 2025, with the Dow up 3.6%. However, five notable "Club" holdings—Salesforce, Bristol Myers Squibb, Apple, Danaher, and DuPont—underperformed significantly, each declining over 10%. These laggards present potential H2 2025 opportunities, with catalysts including Salesforce's upcoming Dreamforce conference focusing on AI tools, Bristol Myers Squibb's critical clinical trial results, Apple's evolving AI strategy and antitrust developments, Danaher's potential leadership change, and DuPont's planned November business spin-off aimed at unlocking value.

Analysis

The first half of 2025 concluded with moderate gains for major U.S. indices, with the S&P 500 and Nasdaq Composite both advancing 5.5% and the Dow Jones Industrial Average rising 3.6% despite headwinds from tariffs, geopolitical tensions, and monetary policy uncertainty. However, performance was highly divergent, with five specific large-cap stocks—Salesforce (CRM), Bristol Myers Squibb (BMY), Apple (AAPL), Danaher (DHR), and DuPont (DD)—each declining by at least 10%. These companies face distinct fundamental challenges: Salesforce (-18.4%) is grappling with a core business slowdown and weak initial AI adoption; Bristol Myers (-18.2%) suffered from a disappointing clinical trial for its schizophrenia treatment, Cobenfy; Apple (-18.1%) is weighed down by tariff impacts, a lackluster AI feature rollout, and antitrust concerns related to its services revenue. Danaher (-13.9%) faces concerns over potential tariffs and drug pricing regulations, compounded by criticism of its management effectiveness. DuPont (-10%) is impacted by its China exposure and is in a pre-spinoff lag phase, which included a price target reduction to $82 from $100 in May. Despite this underperformance, specific catalysts are on the horizon that could drive a second-half recovery, including Salesforce's Dreamforce conference in September, a pivotal new clinical study for Bristol Myers' Cobenfy, and DuPont's planned business separation in November. A recent market rotation out of H1 winners like Nvidia and into some of these laggards suggests a potential shift in investor sentiment.

Key Decisions for Investors

• Investors should monitor for a potential broadening of the market rally, as capital appears to be rotating from first-half momentum leaders into these significantly underperforming large-cap names.
• Focus on distinct, near-term catalysts for the laggards, such as Bristol Myers' upcoming clinical trial results for Cobenfy, Salesforce's September Dreamforce conference for AI updates, and the completion of DuPont's business split in November, as these events are positioned as primary inflection points.
• For Apple, progress in its AI strategy, evidenced by potential partnerships with firms like Anthropic or OpenAI, is a key turnaround signal to watch, alongside any developments in the Justice Department's antitrust case that could affect its high-margin services revenue.
• Given the identified headwinds, positions in these stocks carry significant idiosyncratic risk; for Danaher, a potential CEO change is highlighted as a specific catalyst for a re-rating, while Bristol Myers' future is heavily dependent on a single clinical trial outcome.