These Were the 2 Worst-Performing Nasdaq-100 Stocks in June 2025

Despite the Nasdaq-100's 6.3% gain in June, AppLovin and Lululemon Athletica were the index's worst performers, plunging 10.9% and 25% respectively. AppLovin's decline was primarily driven by its exclusion from the S&P 500 and a critical short report from Culper Research alleging misrepresentation and national security risks, while Lululemon's significant drop followed its downwardly revised fiscal 2025 EPS guidance and subsequent analyst price target cuts. Both stocks have shown limited recovery into July, indicating sustained investor caution.

Analysis

Despite a robust 6.3% gain in the Nasdaq-100 during June, AppLovin (APP) and Lululemon (LULU) significantly underperformed, becoming the index's worst-performing stocks with declines of 10.9% and 25%, respectively. AppLovin's downturn was driven by two key negative catalysts: the market's disappointment following the company's exclusion from the S&P 500 during its June rebalancing, and a highly critical short-seller report from Culper Research. This report introduced substantial risk perception by alleging that AppLovin misrepresented its Chinese operations and shareholders, framing it as a potential national security issue. Concurrently, Lululemon's sharp sell-off was directly triggered by a downward revision to its fiscal 2025 outlook on June 5. The company lowered its diluted EPS forecast from a range of $14.95-$15.15 to $14.58-$14.78, which prompted numerous analysts to slash price targets and intensified selling pressure. The negative momentum for both stocks has persisted into July, indicating that investors have not yet priced in a recovery from these company-specific headwinds.

Key Decisions for Investors

• Investors should treat both AppLovin and Lululemon with caution, as their significant underperformance against a strong market backdrop is driven by specific, unresolved negative catalysts.
• For AppLovin, the primary factor to monitor is any formal company response or independent validation concerning the national security and misrepresentation allegations made in the Culper Research short report, which represents a major overhang.
• For Lululemon, the downward revision in guidance makes future earnings reports critical; investors should scrutinize any data on consumer demand and margin trends to determine if the 25% stock price correction adequately reflects the moderated growth outlook.
• Given the severity and company-specific nature of these issues, current holders may consider re-evaluating their positions, as both stocks are demonstrating a strong negative divergence from the broader technology and growth-oriented market.