Key Highlights
- AppLovin plunged 16% following disappointing Q2 revenue and EBITDA results alongside weak Q3 outlook
- SanDisk declined 9% as Q1 revenue guidance disappointed investors despite a massive 372% yearly revenue jump
- Western Digital sank 14% as traders took profits even after the company exceeded earnings forecasts
- SoundHound AI soared 24% following impressive Q2 performance and upgraded annual guidance
- Moderna climbed 3.5% following FDA clearance for its mFLUSIVA influenza vaccine
A pronounced shift away from technology stocks dominated Thursday’s trading session, dragging down multiple prominent names even as traditional blue-chip equities maintained stability. The Dow Jones Industrial Average appeared poised to notch its fourth consecutive record close.
AppLovin emerged as Thursday’s most significant casualty, plummeting 16% after the advertising technology firm delivered second-quarter revenue and EBITDA figures that fell short of analyst projections. The company’s third-quarter revenue forecast of $2.05 billion to $2.08 billion aligned closely with expectations, yet failed to impress investors following the stock’s impressive recent performance.
Memory Sector and AppLovin Face Steepest Declines
SanDisk tumbled approximately 9% despite delivering fiscal fourth-quarter revenue that skyrocketed 372% compared to the prior year, reaching $8.97 billion. The culprit was forward-looking guidance. The company’s first-quarter revenue projection midpoint fell short of Street expectations, casting a shadow over what were otherwise impressive quarterly results.
Western Digital suffered a 14% decline despite surpassing analyst estimates. The storage company delivered fiscal fourth-quarter revenue climbing 44% year over year to $3.75 billion, while adjusted earnings per share of $3.56 exceeded projections. Its first-quarter guidance also beat consensus forecasts, but after rallying 176% year to date, the stock became vulnerable to profit-taking.
Additional memory-focused companies experienced similar pressure. Micron Technology retreated 3.4% while Seagate Technology dropped 3.9%, mirroring the broader selloff across storage and memory semiconductor stocks.
Celestica tumbled 13% after announcing a $3 billion equity offering priced at $310 per share. While the company stated proceeds would fund expansion of its global AI infrastructure operations, the market responded negatively to shareholder dilution concerns.
SoundHound AI and Moderna Defy Market Weakness
SoundHound AI stood out as an exception to the tech selloff, rocketing 24% higher following second-quarter revenue of $61.9 million, representing 45% year-over-year growth. The voice AI company reported an adjusted loss of just $0.02 per share, significantly better than analyst forecasts, while lifting its full-year revenue guidance to a range of $230 million to $260 million.
Company leadership indicated guidance would receive another update following the completion of its LivePerson acquisition.
Moderna advanced 3.5% after receiving FDA approval for mFLUSIVA, its newly authorized vaccine designed to combat seasonal influenza.
The broader market witnessed capital flowing out of technology shares and into more established blue-chip companies. Futures traded cautiously during early hours as market participants monitored potential developments regarding a possible U.S.-Iran diplomatic framework and partial reopening of the Strait of Hormuz.
SoundHound’s impressive rally demonstrated that exceptional earnings reports could still generate substantial upward momentum, even amid a market environment where numerous high-performing stocks faced selling pressure despite positive results.
Thursday’s session illustrated a market in active rotation, rewarding certain companies for earnings outperformance while penalizing others despite fundamentally solid financial metrics.
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