What Happened?
A number of stocks jumped in the afternoon session after sentiment improved following significant moves from heavyweights like Meta Platforms, which extended its partnership with Broadcom to deploy custom AI chips.
Additionally, reports of Amazon's plans to acquire Globalstar to boost its satellite business provided a strong bullish signal for the industry's continued expansion. Internet companies benefit from the massive, ongoing scale-up of AI-driven infrastructure, which enhances their ability to monetize user data and optimize advertising platforms. In a "risk-on" market, these growth stocks attract capital as investors prioritize companies with deep technological moats and the ability to scale globally through digital ecosystems.
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:
- Online Retail company Chewy (NYSE: CHWY) jumped 3.5%. Is now the time to buy Chewy? Access our full analysis report here, it’s free.
- Financial Technology company LendingTree (NASDAQ: TREE) jumped 2.2%. Is now the time to buy LendingTree? Access our full analysis report here, it’s free.
Zooming In On Chewy (CHWY)
Chewy’s shares are somewhat volatile and have had 11 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 15 days ago when the stock gained 3.3% on the news that President Donald Trump signaled a willingness to end the multi-week military conflict with Iran.
This news provided a much-needed boost to markets. The geopolitical tensions had pushed the Nasdaq-100 index into correction territory, defined as a drop of more than 10% from its peak. Concerns over spiking oil prices and broader market uncertainty weighed heavily on investor sentiment, particularly impacting growth-oriented technology stocks. With the possibility of de-escalation in the Middle East, investors showed renewed confidence, leading to a recovery in major tech names. The Technology Select Sector SPDR Fund (XLK) saw gains, reflecting the broader positive shift in the sector.
Chewy is down 19.8% since the beginning of the year, and at $26.87 per share, it is trading 44.3% below its 52-week high of $48.21 from June 2025. Investors who bought $1,000 worth of Chewy’s shares 5 years ago would now be looking at only $310.22.
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