Stocks and sector exchange-traded funds moved sharply midday as investors digested a fresh batch of earnings updates and company-specific headlines. In the most notable downside moves, Guidewire Software fell after its current-quarter revenue outlook missed expectations and Lululemon dropped on a cautious forecast, while Tesla slid following a federal probe tied to its Cybercab.
On the upside, chip stocks rose on broad strength ahead of the long weekend, and Quanex Building Products jumped after posting a stronger-than-expected quarter. Credit monitoring names were also under pressure after comments from the Federal Housing Finance Agency’s director, while several software and cloud security companies traded lower even after reporting results that beat consensus.
Key takeaways
- Guidewire Software shares fell 21% after current-quarter revenue guidance came in below expectations, underscoring investor focus on near-term growth.
- Tesla dropped 6% as the National Highway Traffic Safety Administration announced an investigation into Cybercab compliance with federal safety standards.
- Semiconductor stocks rallied, with Sandisk up more than 8% and KLA up 7%, lifting the VanEck Semiconductor ETF and the Roundhill Memory ETF.
- Quanex Building Products surged 19% on a strong third-quarter earnings beat, highlighting continued appetite for clear operating momentum.
- Fair Isaac fell more than 15% and credit monitoring peers declined after remarks from the FHFA director alleging overcharging by major credit bureaus.
Company results and forecasts drove the biggest moves
Guidewire Software led the downside, plunging 21% after the company’s revenue guidance for the current quarter came in short of expectations. Guidewire projected revenue of $372 million to $378 million, compared with the LSEG consensus estimate of $387 million. Full-year revenue guidance ranged from $1.71 billion to $1.73 billion, versus the $1.70 billion estimate, a point that did not offset the market’s focus on the near-term miss.
Lululemon Athletica was another major decliner, sliding 17% after issuing a forecast investors deemed muted. The company projected earnings of 93 cents to 98 cents per share on revenue of $2.29 billion to $2.32 billion. Analysts were looking for $2.40 per share and $2.53 billion, and the gap between guidance and consensus appeared to drive the selloff.
Several technology companies traded lower despite reported results that beat consensus, suggesting investors were more concerned with outlook and forward expectations than trailing performance. Zscaler fell 5% even after posting fourth-quarter adjusted earnings of $1.19 per share on revenue of $898 million, topping LSEG consensus calls of $1.09 per share on $877 million. Zscaler also delivered guidance that beat expectations, but the stock still declined. Asana dropped 14% after its third-quarter guidance failed to impress, with the company expecting revenues of $217 million to $219 million and adjusted earnings of 8 cents per share against LSEG expectations of 9 cents per share and $218 million in revenue.
UiPath also declined sharply, down 16%. The company projected current-quarter adjusted operating income of roughly $100 million versus the FactSet consensus call for $99.6 million and revenue guidance of $440 million to $445 million versus an estimate of $441.5 million. Even with those reference points, the stock reaction reflected investor sensitivity to expectations that were not met on key metrics.
Federal probe and credit bureau comments hit specific sectors
Tesla shares fell 6% after the National Highway Traffic Safety Administration announced an investigation into whether the company’s Cybercab complies with all federal safety standards. The investigation was announced after Tesla launched its robotaxis in Austin, Texas on Thursday, adding a regulatory risk overlay to the company’s autonomous-vehicle rollout.
In financial services-adjacent names, credit monitoring companies slid midday. Equifax fell 6.8% and TransUnion dropped more than 7%, while Fair Isaac slid more than 15%. The catalyst was attributed to comments posted on X late Thursday by Bill Pulte, director of the Federal Housing Finance Agency, who said Equifax, TransUnion and Experian have been “overcharging Americans for too long” and that “this will end soon.” Investors appeared to interpret the remarks as a potential precursor to regulatory or policy action affecting the sector.
Semiconductors gained on a risk-on impulse ahead of the long weekend
Chip-related stocks traded higher as the semiconductor space rallied ahead of the long weekend. Sandisk rose more than 8% and KLA climbed 7%. Exchange-traded products tracked the strength as well, with the VanEck Semiconductor ETF rising more than 2% and the Roundhill Memory ETF increasing about 5%. The broad move suggested investors were positioning for improved demand expectations and liquidity flows in semiconductor exposure prior to the holiday pause.
Earnings beats supported some upside, but not across the board
Quanex Building Products surged 19% after posting a strong third-quarter report. The company earned 79 cents per share on an adjusted basis and revenue of $501.8 million, beating the FactSet consensus call for 66 cents per share and $497.5 million. Adjusted EBITDA also surpassed expectations, supporting the sharp upward repricing.
Smith & Wesson rose 6% after reporting results above both the top and bottom lines. The company recorded quarterly earnings of 6 cents per share versus the 6 cent loss expected from analysts polled by FactSet. Revenue came in at $112.6 million compared with a $98.7 million consensus estimate.
In software, Samsara advanced about 4% despite its own guidance tied to full-year expectations. Samsara projected full-year revenue of $2.04 billion to $2.05 billion, above the $2.01 billion LSEG consensus estimate, and guided adjusted earnings of 76 cents to 78 cents per share, surpassing expectations of 72 cents.
Some corporate actions also influenced sentiment. Adobe shares were last down 6% after the company announced that Anil Chakravarthy would become its next CEO, succeeding Shantanu Narayen, who said last March that he would step down.
What to watch next
Investors are likely to stay focused on forward guidance as several stocks moved on outlook rather than reported beats, particularly in retail apparel, cloud security and enterprise software. With market participants also digesting regulatory headlines tied to automakers and credit reporting, attention may shift to upcoming company earnings and guidance updates, as well as scheduled macro data and central bank signals that could influence rate expectations and risk appetite into the next trading session.
