Shares were mixed in premarket trade as investors digested a mix of earnings results, corporate deal news and fresh scrutiny of drugmakers’ China-related activities. AeroVironment jumped sharply after reporting stronger-than-expected profit and revenue, while Digital Realty Trust fell following an agreement to buy a stake in data centers from Blackstone. In a separate development, Merck and AbbVie were lower after a U.S. House committee reportedly opened a probe connected to certain trials conducted in China.
Key takeaways
- AeroVironment shares rallied 30% after an earnings and revenue beat.
- Digital Realty Trust fell 4.5% on an announced $7.8 billion purchase of a stake in three data centers.
- Merck and AbbVie slipped after Reuters reported a U.S. House committee began a probe into China-based trials.
- Strategy reversed some momentum, slipping more than 3% after a 22.6% surge in the prior session.
- Sellas Life Sciences rose more than 3%, extending gains after a prior-session jump tied to changes in senior executive employment agreements.
What drove the move
Earnings and guidance expectations were the dominant driver for AeroVironment. The drone maker reported earnings of $1.84 per share on revenue of $642 million. Analysts surveyed by LSEG had expected a profit of $1.46 per share on revenue of $559 million. The upside relative to consensus helped trigger the steep premarket rally, underscoring investors’ focus on top-line strength as well as profitability.
On the data center front, Digital Realty Trust slid after agreeing to purchase a stake in three fully leased data centers from Blackstone for $7.8 billion. For REIT investors, transaction headlines can quickly reframe near-term valuation and capital allocation expectations, even when underlying assets are leased. The stock’s decline suggests the market weighed the size of the transaction against immediate earnings visibility and the timing of cash-flow contribution.
Drugmakers came under pressure after Reuters reported that a U.S. House committee began a probe into whether Merck and AbbVie were involved in trials conducted in China that reportedly supported the country’s military capabilities. Merck shares were down 0.6% and AbbVie fell 0.5% in premarket trade. For pharmaceutical companies, investigations tied to trial conduct can raise uncertainty around compliance, regulatory risk, and potential reputational impacts—particularly when the issue touches cross-border research.
Market reaction: winners and laggards in premarket trade
AeroVironment’s jump stood out as the largest positive move. A result that exceeded both earnings and revenue expectations typically prompts rapid repricing, especially when the market had been positioned for a softer quarter. The scale of the premarket gain suggests investors viewed the print as a clear improvement versus consensus rather than a marginal beat.
Digital Realty Trust’s decline reflected skepticism around deal economics. Even with fully leased properties—often viewed as supportive of cash flow—large acquisitions can still affect expectations for financing costs, timing of returns, and the REIT’s ability to balance growth with shareholder-friendly metrics.
Strategy’s pullback followed a sharp rebound in the prior session. The crypto proxy stock lost more than 3% in premarket trade, giving back some of Monday’s strength. Strategy had surged 22.6% the previous session, ending an eight-day losing streak, and marked its best one-day gain since Feb. 6, when it climbed 49.6%. The premarket retreat suggests traders were taking profits or reassessing momentum after the prior surge.
Sellas Life Sciences extended recent gains, rising more than 3% after a 24.7% jump the prior session. The earlier rally was tied to the company’s disclosure that it made changes to employment agreements for several C-suite executives, specifically related to severance benefits. Investors appeared split between viewing the update as routine and treating it as a possible signal of strategic change. With the stock still moving higher, the market’s interpretation remained constructive.
What investors are watching next
For AeroVironment, the immediate focus will likely shift from the beat itself to whether the company can sustain the earnings power implied by the quarter’s results—particularly any commentary around demand, production timelines, and revenue durability. For Digital Realty Trust, investors will likely scrutinize deal details once they are fully digested, including financing structure, expected accretion or dilution, and how quickly the investment translates into AFFO or comparable performance measures.
Merck and AbbVie will be watching developments from the House committee probe. In situations like this, stocks can remain sensitive to incremental information—such as scope, timeline, and any related regulatory or legal responses.
Meanwhile, Strategy and Sellas will likely remain tied to near-term momentum and company-specific news flow. With no new fundamental catalyst cited in the premarket snapshot for those names beyond the prior-day moves, investors may look for follow-through—or further mean reversion—based on trading volume and any incremental corporate updates.
Next, markets will also be guided by the broader earnings calendar and any macro catalysts that could influence rate-sensitive sectors such as real estate. Traders will likely keep an eye on upcoming economic data releases and central bank commentary for signals on interest-rate expectations, which can feed into valuations across REITs and growth stocks.
