Why three of NZ’s highest-profile companies have been hammered by the stock market

New Zealand's stock market has faced a dramatic shift in recent months, with three of the country's most prominent companies, Rocket Lab, Xero, and Air New Zealand, experiencing steep declines in their share values. Collectively, these firms have shed nearly $90 billion in market capitalisation compared to their peak values within the past year. The losses have hit both individual investors and broader retirement savings accounts, particularly those managed through KiwiSaver schemes, which hold significant stakes in these companies. Rocket Lab, the aerospace company based in Long Beach, California, but with operations in New Zealand, has suffered the most severe drop. Since reaching a peak of $143.48 per share in May 2026, its stock price has fallen by over 55%, wiping out billions in investor wealth. Despite this, Rocket Lab's shares remain significantly higher than their starting point in early 2024, reflecting a period of rapid growth followed by a sharp correction. The company's valuation had surged dramatically during the previous two years, driven largely by speculation around its space launch capabilities and the promise of future profitability. Air New Zealand, the national carrier, has also seen its stock value fall sharply. From a peak in February 2021, the airline’s shares have declined by 56%, and further losses have occurred since February 2026, bringing the total decline to 25% from its recent high. This has raised concerns among investors, many of whom hold shares through KiwiSaver accounts, given the airline's listing on the New Zealand Stock Exchange. The decline comes amid ongoing challenges in the aviation sector, including fluctuating fuel prices, increased competition, and shifting consumer travel patterns post-pandemic. Xero, the cloud-based accounting software provider headquartered in Wellington, has similarly struggled. The company reached a high of $62 per share in June 2025, but its stock has since dropped by 62%, leaving it far below its previous levels. Analysts attribute much of this decline to a broader trend affecting software-as-a-service (SaaS) companies globally. On February 3, 2026, a significant selloff occurred in the tech sector, with major players like Salesforce, Adobe, and Workday experiencing substantial losses. This event, later referred to as the "SaaSpocalypse," marked a turning point for Xero and similar firms. The catalyst for this widespread decline appears to be advancements in artificial intelligence. Anthropic's release of enhanced features for its AI model, Claude, allowed it to function as a desktop plug-in capable of processing financial data autonomously. This innovation sparked fears that AI could potentially replace traditional accounting software, leading to uncertainty among investors. While some analysts argue that the threat posed by AI is overstated, others believe it has created a long-term challenge for SaaS companies like Xero. Rocket Lab's situation highlights the volatility inherent in speculative investments. Despite losing over half its market capitalisation, the company has still achieved a 67% increase in its stock price over the past 12 months. However, questions remain about its ability to sustain growth without achieving profitability. Analysts suggest that the current downturn is part of a normal cycle following a period of explosive growth, but underlying concerns about the company's business model persist. Investors in these companies face difficult choices as they navigate the uncertain landscape. Retail investors, who have increasingly turned to platforms like Sharesies and Hatch to manage their portfolios, must weigh the risks of holding onto shares in companies that have seen significant declines against the possibility of further losses. Meanwhile, institutional investors and fund managers are reassessing their exposure to these firms, considering both the immediate market conditions and longer-term strategic implications. As the situation unfolds, the performance of Rocket Lab, Xero, and Air New Zealand will continue to be closely watched by both domestic and international markets. Their trajectories offer insights into the broader dynamics affecting technology and transportation sectors, as well as the resilience of New Zealand's economy in the face of global economic shifts.