In recent years, the Nasdaq-100 Index has outperformed the broader S&P 500 Index, and it is now down just 6% from its all-time intraday high, set on September 7, 2021.
However, more than a quarter of all stocks in the Nasdaq-100 are in a bear market, despite outperforming the S&P 500, with a quarter having seen at least a minimum of a 20% drop from their 52-week highs, according to MarketWatch.
In fact, 22 stocks among the Nasdaq-100 Index were down at least 20% from their 52-week highs as of the conclusion of the trading day on September 28, 2021.
What is the Nasdaq-100 Index
The Nasdaq-100 Index NDX comprises the 100 biggest non-financial companies in the whole Nasdaq Composite Index COMP and is weighted by market capitalization. Oddly, a total of 102 stocks are included on the Nasdaq-100 index because Alphabet Inc. and Fox Corporation each have two common-share classes.
It is worth mentioning that out of the 100 listed companies, Pinduoduo Inc, Baidu Inc, Zoom Video Communications Inc (NASDAQ: ZM), and Peloton Interactive Inc. are among the businesses whose stocks have dropped more than 50% from their 52-week highs.
China’s Pinduoduo and Baidu, both of which have suffered substantial losses from their 52-week highs, are at the top of the list, as investors remain worried about how the Chinese government’s crackdowns would affect various industries.
The view from the top of Wall Street
Nevertheless, despite the enormous drops from their 52-week highs, analysts from Wall Street consider this a buying opportunity for the firms in question.
According to the summary of a consensus of analysts surveyed by FactSet, Pinduoduo Inc., 79% of experts have given a buy rating with an implied upside potential of 35%.
Baidu Inc. has an 86% buy rating and 40% upside potential, and 52% of analysts opt to buy Zoom with a 28% upside potential slightly lower than the 35% ZM TipRanks analyst forecast. Lastly, Peloton has 74% of experts choosing to buy with a 32% upside potential.
Ultimately, while China Evergrande Group faces issues over defaulting on its debt, investors will remain wary about stocks connected to the health of China’s credit markets.