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1. CrowdStrike Drops Over 10% Following Q2 Earnings |
MATT FRANKEL, TEAM HIDDEN GEMS |
CrowdStrike (NASDAQ:CRWD) was priced for perfection heading into this earnings report. It was trading for well over 100 times earnings, and for nearly 40 times sales. Although the business is growing impressively, is a 26% top-line growth rate worth paying such a premium for? The market seems to be questioning that after this report.
Let’s be clear. This wasn’t a bad quarter. Far from it. But it wasn’t a blowout quarter either. With CrowdStrike’s stock price roughly doubling over the past three months, investors were looking for the company to hit a home run with its earnings report. That didn’t happen, and it’s why we’re getting a bit of a pullback in the stock.
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2. Why AVGO, FIVE, and VEEV are Falling in Early Trade
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Broadcom (NASDAQ:AVGO) fell around 14% ahead of the opening bell due to results detailing guidance below analysts’ expectations, including not raising its overall AI semiconductor sales guidance for 2026. Despite this, the coming quarter AI revenue is due to jump 200% year over year (YoY).
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Five Below (NASDAQ:FIVE) dropped about 13% in pre-market trading as the latest results came with cautious second-half guidance. CFO Daniel Sullivan is assuming “tariff rates that return to levels that they were at, at the start of our fiscal year.”
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Veeva Systems (NYSE:VEEV) declined by over 6% before the market opened. The latest earnings revealed a slower pace of growth and lower operating margins due to heavier investments.
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3. Quantinuum Goes Public as Sector Expands
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Quantinuum is set to go public today, raising $1.68 billion, in what will be one of the largest tech IPOs of the year and a key test of investor appetite for quantum computing. |
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Shares priced above earlier expectations at $60: The company increased the price from $53-$55, as well as boosting the number of shares on offer, a good sign of demand. Even after floating, Honeywell (NASDAQ:HON) will retain 48.1% of combined voting power, having been the majority owner since Quantinuum was formed in 2021.
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Potential for quantum computing to have widespread adoption: The IPO is another step towards the sector gaining more traction, although challenges remain due to high development costs and technological complexity.
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4. Next Up: Stock Advisor Earnings From Team RB Recs
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The Toro Company (NYSE:TTC) reports before the market opens and is expected to grow revenue and earnings by 5-6% YoY, building on last quarter. The Dividend Investor rec has increased the dividend for 22 consecutive years.
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ServiceTitan (NASDAQ:TTAN) posts results after the market closes, as investors look for continued growth in usage-based and AI-driven products, factors that helped drive a 21% revenue gain last quarter.
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Lululemon (NASDAQ:LULU) should release earnings following the closing bell. Recommended by Team Hidden Gems as well, investors will be watching for progress on full-price sales recovery in North America after the region disappointed last quarter.
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5. Today’s Take: The Best Bet Inside SpaceX
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The actual “space” part of SpaceX was a bit of an afterthought in the company’s S-1, overshadowed by higher projected growth areas like AI and Starlink. I have real questions about the long-term outlook for both of those businesses, but the core rocket business has the potential to be a big moneymaker. |
— LOU WHITEMAN • TEAM HIDDEN GEMS |
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For me, Terafab and its proposed investments in advanced semiconductors and related equipment could prove foundational for building spacefaring data centers. |
— TIM BEYERS • TEAM RULE BREAKERS |
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