What Happened?
A number of stocks fell in the afternoon session after the broader U.S. stock market declined amid investor caution and a pullback in technology stocks.
The main story? Investors are cashing in on a good run and feeling a bit cautious. After a fantastic run, many of those high-flying AI and technology stocks saw investors take profits: selling shares to lock in their gains. This is often called a "market rotation." Money is moving out of the red-hot tech sector (which some worry has become too expensive) and into other parts of the market that investors may currently deem more stable or reasonably-priced.
There's a secondary reason for the cautious mood: The long government shutdown came to an end. Though it's typically interpreted as good news, it also means a flood of delayed economic reports will be released. For weeks, investors were "flying blind" without key updates on the economy's health, like inflation data and the jobs report. In typical "sell the news" fashion, investors may also be taking profits and selling in anticipation that the new data would potentially give the Federal Reserve reasons to slow or even pause future rate cuts.
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:
- Construction and Maintenance Services company Orion (NYSE: ORN) fell 6.4%. Is now the time to buy Orion? Access our full analysis report here, it’s free for active Edge members.
- Electronic Components company Corning (NYSE: GLW) fell 8.3%. Is now the time to buy Corning? Access our full analysis report here, it’s free for active Edge members.
- Renewable Energy company FuelCell Energy (NASDAQ: FCEL) fell 7.5%. Is now the time to buy FuelCell Energy? Access our full analysis report here, it’s free for active Edge members.
- Custom Parts Manufacturing company 3D Systems (NYSE: DDD) fell 8.8%. Is now the time to buy 3D Systems? Access our full analysis report here, it’s free for active Edge members.
- Automobile Manufacturing company Rivian (NASDAQ: RIVN) fell 6.4%. Is now the time to buy Rivian? Access our full analysis report here, it’s free for active Edge members.
Zooming In On 3D Systems (DDD)
3D Systems’s shares are extremely volatile and have had 72 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 7 days ago when the stock dropped 10.1% on the news that the company reported third-quarter financial results that showed a significant drop in revenue. Although the company's loss per share of $0.08 was better than the forecasted loss of $0.12, it missed revenue expectations, reporting $91.2 million against an anticipated $97.68 million. This figure represented a 19% decline compared to the same period in the previous year. The weakness was broad-based, as the company’s Industrial Solutions and Healthcare Solutions segments both experienced large revenue drops of 16% and 22%, respectively. The sharp fall in sales overshadowed the better-than-expected earnings, leading to a negative reaction from investors.
3D Systems is down 32.5% since the beginning of the year, and at $2.16 per share, it is trading 54.2% below its 52-week high of $4.72 from February 2025. Investors who bought $1,000 worth of 3D Systems’s shares 5 years ago would now be looking at an investment worth $300.00.
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