The rush to invest in artificial intelligence has fueled significant growth for many tech companies, but not all AI-linked stocks have thrived in 2026. Whereas some companies have seen their valuations soar on the promise of AI-driven innovation, others have stumbled, leaving investors with substantial losses. Identifying the worst-performing AI-linked large-cap stocks is crucial for understanding the risks and realities of this rapidly evolving market, particularly within the cloud, semiconductor and robotics sectors. This analysis reveals that despite the overall bullish sentiment surrounding AI, selective caution is warranted.
Early in 2026, several prominent companies that have heavily invested in or are closely tied to AI technologies are lagging behind market expectations. Madrigal Pharmaceuticals (MDGL) and Veeva Systems (VEEV) are currently among the most notable underperformers among large-cap stocks with significant AI exposure. The reasons behind these declines are varied, ranging from clinical trial setbacks to shifting market dynamics and increased competition. Understanding these factors is essential for investors navigating the complex landscape of AI-driven investments.
As of mid-June 2026, Madrigal Pharmaceuticals has experienced a decline of 23.6% in its stock price. Yahoo Finance data confirms this downturn. The pharmaceutical company, while not a traditional AI firm, utilizes AI extensively in drug discovery and clinical trial analysis. The primary driver of this decline stems from disappointing Phase 3 trial results for their lead drug, resmetirom, intended to treat nonalcoholic steatohepatitis (NASH). While the drug showed some efficacy, the results weren’t as robust as initially anticipated, leading to investor concerns about its commercial potential. This highlights the risk inherent in biotech investments, even those leveraging advanced technologies like AI.
Cloud and Software Sector Struggles
Veeva Systems (VEEV), a cloud-based software provider for the life sciences industry, has seen its stock fall by 19.7% year-to-date, according to MarketWatch. Veeva has been integrating AI into its offerings to enhance data analytics and streamline clinical processes. However, the company has faced headwinds due to slowing growth in the pharmaceutical industry and increased competition from other cloud providers. Analysts at Goldman Sachs recently downgraded Veeva, citing concerns about the pace of AI adoption within the life sciences sector and the potential for margin compression.
The slowdown in Veeva’s growth underscores a broader trend: the implementation of AI in established industries isn’t always seamless or immediately profitable. Companies need to demonstrate a clear return on investment for their AI initiatives, and simply incorporating AI into existing products isn’t enough to guarantee success. The market is increasingly discerning, demanding tangible results and measurable improvements in efficiency and profitability.
Semiconductor and Robotics ETF Performance
Beyond individual stocks, several exchange-traded funds (ETFs) focused on semiconductors, technology, and robotics have also underperformed in 2026. While specific ETF performance varies, many have experienced modest declines or have failed to keep pace with the broader market rally. For example, the Global X Robotics & Artificial Intelligence ETF (BOTZ) has seen relatively flat growth, while the iShares Semiconductor ETF (SOXX) has experienced more moderate gains compared to previous years. This suggests that the AI boom hasn’t uniformly benefited all segments of the tech industry.
Factors Contributing to Underperformance
Several factors are contributing to the underperformance of these AI-linked stocks and ETFs. One key issue is inflated valuations. Many AI-related companies saw their stock prices surge in 2024 and early 2025, driven by hype and speculation. As the market matures, investors are becoming more selective, focusing on companies with solid fundamentals and a clear path to profitability.
Another challenge is the high cost of AI development and deployment. Building and maintaining AI systems requires significant investment in infrastructure, talent, and data. Companies that fail to manage these costs effectively may struggle to achieve the returns necessary to justify their AI investments. The regulatory landscape surrounding AI is still evolving, creating uncertainty for companies operating in this space. Concerns about data privacy, algorithmic bias, and the ethical implications of AI are prompting governments around the world to consider new regulations, which could impact the growth of the AI industry.
The Robotics Sector: A Case Study
The robotics sector, in particular, has faced challenges. While AI is essential for advancing robotics capabilities, the practical application of robots in various industries has been slower than anticipated. High development costs, safety concerns, and the need for specialized skills have hindered the widespread adoption of robots in manufacturing, logistics, and other sectors. Companies focused on developing advanced robotics solutions are facing pressure to demonstrate a clear return on investment, and those that fail to do so may struggle to attract funding and maintain investor confidence.
Looking Ahead
The underperformance of these AI-linked stocks serves as a reminder that investing in AI is not without risk. While AI has the potential to transform many industries, not all companies will succeed in capitalizing on this opportunity. Investors should carefully evaluate the fundamentals of each company, assess the competitive landscape, and consider the potential regulatory challenges before investing in AI-related stocks. The next major checkpoint for Madrigal Pharmaceuticals will be the release of further data from ongoing clinical trials in Q4 2026, while Veeva Systems will report its second-quarter earnings in late July, providing further insight into its growth trajectory.
This evolving situation demands continued monitoring of key performance indicators and a nuanced understanding of the interplay between technological advancement, market dynamics, and regulatory oversight. Share your thoughts on these trends and your own investment strategies in the comments below.
Disclaimer: This article is for informational purposes only and should not be considered financial advice. Investing in the stock market involves risk, and you could lose money. Consult with a qualified financial advisor before making any investment decisions.
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