Small-Cap Highlights: New Nasdaq Rules, AI Causes Problems for TripAdvisor, Archer's Helicopter

Nasdaq has tightened its rules for issuers with a market capitalization of less than $5 million, putting nearly 200 small companies at risk of delisting. An analyst downgraded TripAdvisor’s rating—the company’s business is suffering due to artificial intelligence. Archer Aviation, a developer of air taxis, unveiled a military helicopter. The week’s top stories from July 20–24—in the Oninvest digest.

The Nasdaq Stock Market has changed its standards and will now be able to immediately delist shares of companies whose market capitalization remains below $5 million for 30 consecutive days. According to the exchange, a prolonged decline indicates business problems, making such securities a target for manipulation and fraud. The U.S. Securities and Exchange Commission (SEC) approved the new rules on July 22. Analysts at Freedom Broker, at the request of Oninvest, estimate that nearly 200 issuers are now at risk of delisting.

Analysts at Freedom Broker note that for issuers valued at $5–20 million, the risk of delisting is becoming one of the key factors in the investment case. According to the Finviz screener, there are currently 557 stocks on the Nasdaq with a market capitalization of less than $20 million, of which 196 are at immediate risk of imminent delisting (market capitalization of less than $5 million), the analysts noted.

Freedom Broker describes the impact of the new rules on the market as a whole as largely positive—fewer extremely illiquid IPOs and other scams. However, analysts also note that there will be fewer accessible sources of capital for early-stage biotech companies, technology firms that have not yet generated revenue, and other issuers that need the public market precisely during periods of financial difficulty.

The brokerage firm BTIG has downgraded its rating on shares of TripAdvisor, the owner of the travel portal of the same name, from “Buy” to “Hold.” The main reasons: the expansion of AI-powered search and doubts about the clarity of the company’s long-term strategy.

Traffic to websites managed by TripAdvisor is declining, as users can now get answers to their questions directly from search engines or AI assistants. Not only is the travel portal itself feeling the impact, but so are the tour booking service Viator and the restaurant reservation platform TheFork. TripAdvisor plans to sell TheFork to American Express for $700 million.

Following the rating downgrade, the brokerage’s analysts did not set a price target for TripAdvisor shares, explaining that the sale of TheFork had not clarified the company’s long-term strategy. BTIG lowered its revenue forecasts for TripAdvisor by just under 1%—to $561 million for the third quarter and to $427 million for the fourth.

According to MarketWatch, eight Wall Street analysts have a “hold” rating on the company’s stock, four have a “buy” rating, and four have a “sell” rating. The average price target is virtually equal to the current stock price.

Archer Aviation, the developer of the Archer air taxi, unveiled a new military helicopter created in partnership with Anduril Industries, which specializes in defense technologies. Archer Aviation’s stock soared nearly 20% on July 20, reaching $5.3.

The Thunder helicopter is built on a new dual-purpose platform that can be used for both military and commercial applications. Thanks to its new design, it is capable of flying longer distances than traditional helicopters. Archer has already conducted tests and plans to make its first full-scale flight in 2027. At the same time, the company is finalizing certification of its electric air taxis and expects to launch commercial flights in time for the 2028 Olympics in Los Angeles.

Since the beginning of the year, Archer's stock price has fallen by nearly 32%. However, Wall Street generally views the company's outlook positively: six analysts recommend buying the stock, and three recommend holding it.

QumulusAI, a company that provides cloud infrastructure for artificial intelligence, has announced a partnership with tech giant Nvidia. This partnership allows the company to offer third-party companies rapid access to computing power based on Nvidia graphics processing units (GPUs) and to its infrastructure.

Among Nvidia’s other partners are Nebius Group and the Crusoe Cloud platform. However, QumulusAI’s stock price plummeted by 33% on July 17, the day the news was announced. It was the company’s second day of trading on the stock exchange. The day before, the company went public via a direct listing; its shares opened at $38, but by the close of trading, the price had plummeted by nearly 44%.