What Happened?
Shares of e-commerce pet food and supplies retailer Chewy (NYSE: CHWY) jumped 5.8% in the afternoon session after Raymond James upgraded the company from “Market Perform” to “Outperform” and set a $28 price target.
The analyst firm pointed to an attractive risk-to-reward profile for the stock following a significant selloff. Chewy's stock had previously fallen 33% since its fiscal third-quarter results. Raymond James noted that investor expectations had been reset to more conservative levels. The firm also highlighted the potential for gains in sales and profit margins starting in 2026, suggesting confidence that the stock had more room to run.
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What Is The Market Telling Us
Chewy’s shares are somewhat volatile and have had 13 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 2 days ago when the stock dropped 1.9% on the news that investor fears over artificial intelligence disrupting the software industry sparked a broad sell-off.
The anxiety stemmed from the rapid adoption of new 'agentic AI' tools, which some investors believed could dismantle traditional Software-as-a-Service (SaaS) business models. This 'AI Panic' led to indiscriminate selling across the sector. The market move reflected growing concerns about the downside of the AI boom for established software companies.
Chewy is down 23.1% since the beginning of the year, and at $25.74 per share, it is trading 46.6% 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 an investment worth $225.88.
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