What Happened?
A number of stocks fell in the afternoon session after investors took some profits off the table as markets awaited signals on future monetary policy from the Federal Reserve's Jackson Hole symposium later in the week.
The downturn in the market was largely attributed to a significant sell-off in megacap tech and chipmaker shares. Nvidia, Advanced Micro Devices (AMD), and Broadcom all saw notable drops, dragging down the VanEck Semiconductor ETF. Other major tech-related companies like Tesla, Meta Platforms, and Netflix were also under pressure. A key reason for this trend is that much of the recent market gains have been 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.
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:
- Hardware & Infrastructure company IonQ (NYSE: IONQ) fell 8.3%. Is now the time to buy IonQ? Access our full analysis report here, it’s free.
- Terrestrial Telecommunication Services company Lumen (NYSE: LUMN) fell 3.1%. Is now the time to buy Lumen? Access our full analysis report here, it’s free.
- Digital Media & Content Platforms company Getty Images (NYSE: GETY) fell 3.4%. Is now the time to buy Getty Images? Access our full analysis report here, it’s free.
- Industrial & Environmental Services company Vestis (NYSE: VSTS) fell 3.6%. Is now the time to buy Vestis? Access our full analysis report here, it’s free.
- Satellite Telecommunication Services company Globalstar (NASDAQ: GSAT) fell 3.8%. Is now the time to buy Globalstar? Access our full analysis report here, it’s free.
Zooming In On IonQ (IONQ)
IonQ’s shares are extremely volatile and have had 103 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 8 days ago, when the stock gained 7.1% on the news that an SEC filing revealed that Amazon had taken a $36.7 million equity stake in the quantum computing company. This strategic investment, disclosed in an SEC filing, is Amazon's first in a publicly traded quantum hardware company and solidifies IonQ's position as a key partner in the AWS Braket quantum cloud service. The move signals a strong vote of confidence from the cloud giant, aiming to accelerate the commercialization of quantum computing. The news amplifies existing positive momentum for IonQ, which recently reported second-quarter revenue that beat expectations and raised its full-year guidance. Further bolstering investor sentiment are recent comments from Microsoft's CEO, Satya Nadella, who called quantum computing the "next big accelerator in the cloud," underscoring the significant potential for industry leaders like IonQ, whose hardware is already available on major cloud platforms.
IonQ is down 14.7% since the beginning of the year, and at $36.79 per share, it is trading 28% below its 52-week high of $51.07 from January 2025. Investors who bought $1,000 worth of IonQ’s shares at the IPO in January 2021 would now be looking at an investment worth $3,406.
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