Recursion Pharmaceuticals Stock Crashes: What Sparked Tuesday’s Bloodbath?

Another biotech darling bites the dust—Recursion Pharmaceuticals shares got eviscerated in Tuesday's trading session. Here's why the market turned its back on this AI-driven drug discovery play.

The sell-off nobody saw coming

No warnings. No trial failures. Just the cold, efficient blade of Wall Street's profit-taking machinery slicing through yet another high-flying name.

When algorithms attack

Algorithmic traders likely amplified the downward spiral—because nothing says 'progress' like machines panic-selling other machines' decisions about hypothetical drug candidates.

The silver lining (if you squint)

Long-term believers argue this is just volatility in an otherwise sound thesis. Because in biotech, 'sound thesis' is code for 'we're still burning cash with no revenue in sight.'

One thing's certain: Tuesday's action proves even AI-powered moonshots aren't immune to good old-fashioned human greed and fear.

Second quarter: revenue rose, but net loss deepened

For its second quarter, Recursion earned $19.2 million in revenue, which was up from the slightly more than $14.4 million in the same period of 2024. However, the clinical-stage biotech company's generally accepted accounting principles (GAAP) net loss deepened considerably, coming in at almost $172 million ($0.41) against the $97.5 million deficit in the year-ago period.

Image source: Getty Images.

Although analysts tracking the stock were collectively modeling a lower revenue figure of $15.4 million, their net loss estimate was considerably narrower, at $0.35 per share.

Recursion, which targets cancer and rare disorders with its investigational drugs, provided an update on its pipeline. The most advanced of its programs, oncology drug REC-617, advanced into a phase 1/2 clinical trial in the first half of the year.

Teaming up

As a biotech without a product currently on pharmacy shelves, Recursion generates modest revenue largely from collaborations with large pharmaceutical companies. Among these well-known mainstays areand.

In the earnings release, it updated the status of several of these; an especially promising one now is a tie-up with, which has the potential to produce more than $300 million in milestone payments.