What Happened?
A number of stocks fell in the afternoon session after the major indices continued to pull back, with technology stocks accounting for most of the market's largest decliners. A key reason for this trend is that much of the recent market gains were concentrated in the "AI trade," which includes these large technology and semiconductor companies. So this could also mean that some investors are locking in some gains ahead of more definitive feedback from the Fed.
Despite the downturn, some analysts viewed this as an opportunity to own some of the "Core AI winners." Dan Ives of Wedbush Securities commented, "In our view, the tech bull cycle will be well intact for at least another 2-3 years, given the trillions being spent on AI infrastructure/software/chips/power/apps looking ahead. This remains our tech playbook and investor roadmap." Additionally, mixed earnings reports from retailers, such as Target, have added to the market's weakness. Investors are closely monitoring these reports for insights into the broader economic health and the potential impact of new tariffs on inflation.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Ground Transportation company Avis Budget Group (NASDAQ: CAR) fell 6%. Is now the time to buy Avis Budget Group? Access our full analysis report here, it’s free.
- Senior Health, Home Health & Hospice company Option Care Health (NASDAQ: OPCH) fell 4.9%. Is now the time to buy Option Care Health? Access our full analysis report here, it’s free.
- Data Infrastructure company C3.ai (NYSE: AI) fell 3.9%. Is now the time to buy C3.ai? Access our full analysis report here, it’s free.
- Online Marketplace company The RealReal (NASDAQ: REAL) fell 3.7%. Is now the time to buy The RealReal? Access our full analysis report here, it’s free.
- Gig Economy company DoorDash (NASDAQ: DASH) fell 4.4%. Is now the time to buy DoorDash? Access our full analysis report here, it’s free.
Zooming In On Avis Budget Group (CAR)
Avis Budget Group’s shares are extremely volatile and have had 36 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 21 days ago when the stock dropped 14.9% on the news that the company reported disappointing second-quarter financial results that fell significantly short of analyst expectations. The car rental company’s earnings per share (EPS) came in at just $0.10, a staggering 95% below the consensus estimate of $2.02 and a 75.6% drop from the prior-year quarter. Total revenue also disappointed, decreasing by 0.3% year-over-year to $3.04 billion, which missed Wall Street's forecast of $3.07 billion. The company’s net income also declined sharply, falling 66.7% to $5 million. The substantial miss on profitability and the slight revenue decline prompted a strong negative reaction from investors.
Avis Budget Group is up 83.1% since the beginning of the year, but at $147.27 per share, it is still trading 29% below its 52-week high of $207.55 from July 2025. Investors who bought $1,000 worth of Avis Budget Group’s shares 5 years ago would now be looking at an investment worth $4,465.
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