What Happened?
A number of stocks jumped in the afternoon session after the market experienced a sharp sector rotation, as investors fled growth-oriented technology stocks and piled into value-oriented names amid growing valuation concerns.
This divergence was stark: the tech-heavy Nasdaq struggled, losing 0.2%, while the Dow rallied. This shift away from tech was triggered by a series of negative catalysts in the AI sector. AI cloud provider CoreWeave slid on disappointing guidance, while chip darling Nvidia pulled back after SoftBank sold its stake. This "hurt the AI trade," dragging down related names like Micron and Oracle. As capital left tech, it sought safety in "higher quality" defensive names. Health care giants like Merck, Amgen, and Johnson & Johnson saw significant buying, boosting the Dow.
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:
- Research Tools & Consumables company Bio-Techne (NASDAQ: TECH) jumped 3.6%. Is now the time to buy Bio-Techne? Access our full analysis report here, it’s free for active Edge members.
- Healthcare Technology for Patients company Tandem Diabetes (NASDAQ: TNDM) jumped 6.8%. Is now the time to buy Tandem Diabetes? Access our full analysis report here, it’s free for active Edge members.
- Dental Equipment & Technology company Align Technology (NASDAQ: ALGN) jumped 4.3%. Is now the time to buy Align Technology? Access our full analysis report here, it’s free for active Edge members.
- Patient Monitoring company DexCom (NASDAQ: DXCM) jumped 5.6%. Is now the time to buy DexCom? Access our full analysis report here, it’s free for active Edge members.
- Surgical Equipment & Consumables - Specialty company Teleflex (NYSE: TFX) jumped 4.2%. Is now the time to buy Teleflex? Access our full analysis report here, it’s free for active Edge members.
Zooming In On Tandem Diabetes (TNDM)
Tandem Diabetes’s shares are extremely volatile and have had 42 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 4 days ago when the stock gained 20.3% on the news that the company reported third-quarter results that surpassed analyst expectations for both revenue and earnings per share.
For the quarter, Tandem posted revenue of $249.3 million, a 2.2% year-over-year increase, which was well ahead of the consensus estimate of $236 million. The company's loss per share came in at $0.31, narrower than the $0.32 loss that analysts had predicted. The results were also bolstered by an improvement in operational efficiency, as the company's operating margin increased to -9.2% from -10.7% in the same period a year ago. Overall, it was a strong quarter that significantly exceeded Wall Street's expectations.
Tandem Diabetes is down 51.1% since the beginning of the year, and at $17.52 per share, it is trading 53.3% below its 52-week high of $37.53 from January 2025. Investors who bought $1,000 worth of Tandem Diabetes’s shares 5 years ago would now be looking at an investment worth $168.03.
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