With US stocks facing significant setbacks over the last 12 months, Wall Street concluded 2022 with its worst yearly result since the Global Financial Crisis.

All three of the major averages faced selling pressure, ending a three-year winning streak. The Dow Jones finished 2022 down 8.8%, the S&P 500 shed 19.4%, and the Nasdaq tumbled 33.1%.

Amid these results, there was no shortage of US stocks that incurred heavy losses over the last year.

Here is a recap of the five worst-performing large-cap stocks over the last 12 months. Is there further downside ahead, or could they represent turnaround stocks in the making?

Sea Limited (NYSE: SE)

With shares in consumer internet company Sea down about 70% over the last year, it headlines the list of the US stock market biggest underperformers. 

Amid the risk-off sentiment that saw many investors pay closer attention to profits instead of revenue growth, Sea was a prime casualty that prioritised the latter over recent years.

The Singapore-based firm, which runs e-commerce platforms and also operates across the gaming industry, suffered from its biggest setback in August when it reported its second-quarter earnings. At the time, it suspended its full-year guidance for e-commerce sales, highlighting the extent of macro uncertainties, and even slashing its workforce by thousands.

More recently, the company announced a pivot from chasing high growth to profitability, which helped pare the magnitude of the stock downfall.

Shopify (NYSE: SHOP)

In a year where the economic outlook turned cloudy, Shopify was hit by a slowdown in e-commerce sales growth, while its losses swelled.

Like many of its peers, the company was largely a victim of its own success throughout the pandemic. Whereas stay-at-home orders benefitted online sales, the economic reopening saw consumers wind back their online spending and embrace in-store shopping as soon as the worst of the pandemic faded.

While this was unfolding, Shopify battled merchandise issues, with supply chain bottlenecks and inflation wreaking havoc. The timing couldn't have been worse for the company, which had just ramped up significant investment into the infrastructure behind its online platform.

With interest rates tightening at the fastest rate in decades, growth trends plunging from triple-digit levels to the mid-teens, and the risk of a recession ahead, shares in Shopify are down about 66% over the last 12 months.

Tesla (NASDAQ: TSLA)

Perhaps the biggest name to stumble in 2022 was none other than electric vehicle pioneer Tesla. Shares in the tech giant are 65% below this time last year, with the once trillion dollar firm now valued at less than US$400 billion.

Beyond the general tech sell-off, Tesla woes were driven by a number of causes.

In China, the company manufacturing operations took a hit various times as COVID restrictions crippled output and led to supply shortfalls. That ultimately resulted in a miss' in terms of meeting the company annual forecast for deliveries.

At the same time, concerns about the global economy, and the risk of a slowdown in demand for electric vehicles scared investors away.

But the elephant in the room was Elon Musk decision to acquire and lead Twitter, generating significant controversy in the process. Not only have some onlookers described that move as a major distraction for the successful entrepreneur, but it saw Musk sell down his stake in Tesla on several occasions to fund the deal.

Meta Platforms (NASDAQ: META)

With a share price slump of approximately 60%, Meta Platforms was in the doldrums for almost the entirety of the last year. Previously known as Facebook, the stock made a strategic pivot towards the metaverse, resulting in the company effectively taking on a new direction.

However, this strategy managed to fall short of the market expectations. The company invested heavily in an effort to develop a virtual world that occupies an increasing amount of time out of consumers' lives, underpinned by AI and virtual reality technology. Shareholders have continued to raise doubts about this strategy, suggesting the company metaverse is failing.

Meanwhile, an advertising slowdown had an impact for a number of social media firms. With concerns about elevated inflation and a weak economic outlook, many companies dialled back their spending on ads via Facebook. 

For the first time, the company also recorded a decline across its total user base on Facebook. This was largely a byproduct of growing competition in the segment, with younger generations opting for alternative platforms.

Warner Bros Discovery (NASDAQ: WBD)

While its shares have rallied more than 40% in the last fortnight, Warner Bros Discovery is still sitting on a loss of 56% over the last year.

Spun out from the merger between AT&T and Discovery back in April, 2022, the media stock was caught up in an extremely tricky trading environment. Inflationary challenges were, and remain a primary concern for movie and media stocks, both in terms of consumer demand, as well as higher streaming expenses that reduced margins. 

With a significant number of players operating in the same industry, the effects of competition were an ever-present threat for Warner Bros Discovery in 2022. The likes of Netflix, Hulu, Amazon Prime and many others are fighting for a largely overlapping market audience.

More broadly, the company direct-to-consumer segment remained unprofitable, continuing to offset positive earnings from the company networks and studios division. 

On the back of its overall unprofitability, management opted to cancel some of the company biggest film projects and fire staff, rather than invest in fresh content. That decision rocked investor sentiment, with the company overall growth outlook losing faith among shareholders.

Other Mentions

Not only was Tesla hit by supply and demand concerns for its electric vehicles, but other manufacturers such as Lucid Group (NASDAQ: LCID), Rivian (NASDAQ: RIVN), and Nio (NYSE: NIO) faced setbacks amid industry-wide issues. The end of the pandemic led to a re-rate in a host of stocks that surged during the stay-at-home period, including areas spanning work management tools, cloud computing, and video gaming. Among the biggest names to fall out of favour were Zoom Video (NASDAQ: ZM), Docusign (NASDAQ: DOCU), Atlassian (NASDAQ: TEAM), Unity Software (NYSE: U), Roblox (NYSE: RBLX), Okta (NASDAQ: OKTA), Cloudflare (NYSE: NET), Zscaler (NASDAQ: ZS), and Snowflake (NYSE: SNOW).Elsewhere, digital payments and the rest of the tech sector were a prominent sight among the year underperformers. Stocks like Match Group (NASDAQ: MTCH), DoorDash (NYSE: DASH), NU Holdings (NYSE: NU), Spotify (NYSE: SPOT), Palantir (NYSE: PLTR), Snap (NYSE: SNAP), and PayPal (NASDAQ: PYPL) all took massive haircuts amid concerns about rising interest rates, lofty valuations, and slowing growth.