According to CNBC, shares of Zscaler fell more than 23% in premarket trading after the cloud security company forecast current-quarter revenue of $875 million to $878 million, short of the $879 million consensus tracked by LSEG. The company did post a fiscal third-quarter adjusted earnings of $1.08 per share, topping estimates of $1.01, and revenue of $850 million, above the $835 million consensus. The revenue guidance miss weighed on the stock and spilled into the broader cybersecurity group, with both Palo Alto Networks and CrowdStrike trading lower after Zscaler’s results.
Other notable moves in the session included Bath & Body Works, which jumped about 15% after delivering first-quarter results that topped expectations and signaling higher current-quarter guidance. The retailer guided to earnings per share of 20 to 25 cents in the second quarter, above the 21-cent consensus estimate from analysts polled by FactSet. First-quarter earnings and revenue also edged past estimates.
Semtech rose about 7% after the semiconductor maker posted first-quarter adjusted earnings and revenue that beat estimates. The company also guided for the current quarter’s earnings, adjusted operating margin and EBITDA to exceed analysts’ expectations, according to LSEG.
Micron Technology extended its advance, with shares up roughly 7% after the memory-chip maker crossed the $1 trillion market-cap milestone on Tuesday, joining a select group of mega-cap names. It was the standout performer in premarket trading on the S&P 500.
SanDisk rose about 3% after Barclays upgraded the stock to outperform, citing what the firm described as a continued supply/demand imbalance through 2027 that should sustain pricing power for players like SanDisk.
Insulet sank roughly 5% after unveiling a voluntary medical device correction for certain lots of its insulin-pump pods. The issue stems from a manufacturing fault that could result in insulin under-delivery to patients.
Dicks Sporting Goods slipped about 2.5% after reaffirming lighter full-year guidance for earnings of $13.50 to $14.50 per share. Analysts polled by FactSet expected $14.30 per share for the year. First-quarter earnings came in at $2.90 per share, short of the consensus of $2.92, though revenue beat estimates.
Box fell around 1.5% after the cloud-based content-management company projected full-year adjusted earnings of $1.56 per share, below the $1.63 consensus from LSEG. The company did post first-quarter adjusted earnings of 37 cents on revenue of $306 million, beating the 36 cents and $304 million expected by analysts.
MGM Resorts International rose about 3% after JPMorgan upgraded the stock to overweight from neutral, arguing that U.S. leisure travel remains resilient despite macroeconomic headwinds and that this is a tailwind for Las Vegas Strip growth.
Modine Manufacturing edged up roughly 2.5% after reporting fiscal fourth-quarter adjusted earnings of $1.71 per share on revenue of $954.5 million, ahead of the $1.55 per share and $920.7 million expected by analysts polled by FactSet.
Abercrombie & Fitch climbed more than 4% after posting first-quarter adjusted earnings of $1.47 per share, above the $1.28 consensus. However, revenue came in slightly below estimates and the near-term guidance was seen as softer than expected, weighing on other retailers’ stock moves.
Key takeaways
- Zscaler stock down more than 23% after a mixed quarter and revenue guidance below consensus; key earnings beat alongside a disappointing revenue outlook is expanding selling pressure on peers.
- Micron surges about 7% in premarket trading, signaling continued strength in semis as the company crosses a $1 trillion market cap milestone, a rare milestone that highlights AI and data-demand trends driving demand for memory chips.
- Bath & Body Works up about 15% on stronger‑than‑expected Q1 results and brighter Q2 guidance, underscoring resilient consumer spending in discretionary names.
- Semtech gains roughly 7% after beating on adjusted earnings and revenue and guiding above expectations for the current quarter.
- Mixed bag across consumer and tech names with Insulet and Dick’s Sporting Goods sliding on cautious updates or issues, while Sandisk and MGM leveraged upgrades or favorable commentary to move higher in parts of the market.
What drove the move
The biggest price action centered on Zscaler, where the company’s revenue guidance for the current quarter came in below analysts’ expectations, even as its fiscal third-quarter earnings beat. The divergence between the earnings beat and the revenue miss underscored a familiar theme for high-growth software/security names: profits can be solid even as top-line growth guidance disappoints, leaving investors balancing near-term fundamentals against longer-term growth narratives. The result was a broad pullback in cyber-security peers, with Palo Alto Networks and CrowdStrike trading lower as traders reassessed the sector’s risk-reward dynamics in a tighter macro environment.
Elsewhere, Bath & Body Works demonstrated the potential for upside surprise in consumer discretionary names when management signaled higher-than-expected current-quarter profitability, bolstering sentiment around retailer expectations for the remainder of the year. Semtech’s stronger-than-expected quarterly numbers reinforced a continued revival in demand within the semiconductor space, while the upgrade trajectory for SanDisk from Barclays highlighted a belief that supply-demand imbalances could extend into 2027, providing pricing power for select chipmakers.
In contrast, Insulet’s voluntary device correction plan and Dick’s weaker near-term guidance provided reminders that not all consumer and medtech names are benefiting from the current cycle. Box’s revenue trajectory also hinted at lingering pressure in software-enabled content management, even as first-quarter results beat on several lines.
Market reaction
The premarket tape showed a risk-off tone in technology and cybersecurity names after Zscaler’s results, with peers retreating as investors weighed the implications for secular growth trends versus near-term profitability. The broader semiconductor group found support with Micron’s move higher, reflecting ongoing enthusiasm around AI-driven demand for memory and storage capacity, and the tech-heavy Nasdaq sentiment in parts of the session was supported by the Micron milestone and other favorable updates.
On the earnings side, Bath & Body Works’ guidance upgrades helped lift the stock, illustrating how consumer-focused companies can still unlock upside when they show disciplined cost control and margin expansion. The stock moves across Insulet, Dick’s, Box and Abercrombie highlighted the uneven landscape across healthcare devices, athletic retail, cloud software, and apparel, where company-specific issues or guidance discrepancies can drive outsized swings relative to the broader market.
What analysts are saying
Analysts highlighted the split between earnings strength and revenue guidance in Zscaler’s report, noting that investors are increasingly placing a premium on top-line visibility and sustained growth margins, even as bottom-line results remain robust. The reaction across cybersecurity peers—despite their own earnings trajectories—reflects a cautious stance on near-term multiples in a period of elevated rate expectations and sector rotation. Upgrades and downgrades cited in market notes included Barclays’ upgrade of SanDisk to outperform and JPMorgan’s upgrade of MGM to overweight, underscoring a preference for names with durable consumer or discretionary demand and improving cash-flow metrics.
Other commentary focused on the resilience seen in consumer or leisure-adjacent cycles, as Bath & Body Works demonstrated that better-than-expected quarterly performance can still translate into stronger forward guidance when consumer demand proves resilient. Conversely, the mixed signals from Insulet and Dick’s Sporting Goods remind investors that regulatory, manufacturing or guidance risks can quickly alter the path for specific sub-sectors within health care devices and retail alike.
Bigger picture
The session’s moves reflect a blended narrative for investors navigating a market that rewards earnings quality and margin discipline but remains sensitive to top-line visibility and forward guidance. The chatter around the $1 trillion market-cap milestone for Micron underscores the broader enthusiasm for AI-driven demand that has sustained semiconductors through the current cycle. Yet the Zscaler setback is a reminder that even in fast-growing software segments, investors demand clear, achievable top-line trajectories to support higher multiples.
Across macro themes, traders appear focused on risk balance—how resilient consumer spending can be in a cautious macro backdrop, how enterprise software demand evolves as companies manage budgets, and how memory producers will navigate ongoing supply/demand tensions through 2027. With a busy slate of earnings and guidance ahead, investors will be watching for confirmation that these trends can be sustained in the face of potential rate moves, inflation data, and evolving geopolitical tensions that influence corporate capex and cloud spending.
Looking ahead, market participants will be keyed into next-quarter guidance from the groups that moved today, along with broader earnings releases and macro data releases that could shape sentiment around growth versus value stocks. Investors will also be listening for any updates on inventory cycles, supply chains, and cost structures that can alter either side of the earnings equation.
As the week advances, the calm before the next round of results could hinge on whether the strength seen in select names endures or proves episodic. The coming data, earnings reports, and central-bank signals will be critical for assessing whether today’s risk-off tilt in high-growth tech can stabilize or reverse into a clearer trajectory for the remainder of the quarter.
— CNBC’s reporting and data inputs were used to frame the premarket movements and consensus figures. Data shown reflects the latest available figures from LSEG and other market trackers.
