What Happened?
A number of stocks jumped in the morning session after strong results from chipmaker Nvidia eased lingering concerns about a potential bubble, especially in the tech sector.
The tech giant delivered another blockbuster earnings report, with sales, profits, and guidance exceeding Wall Street expectations. CEO Jensen Huang let the data do the talking as he acknowledged the growing sentiment about an AI bubble, while affirming that sales for Nvidia's current-generation GPU, called Blackwell (mostly used for AI applications), are "off the charts."
A stronger-than-expected September jobs report from the Bureau of Labor Statistics reinforced this bullish sentiment. Nonfarm payrolls rose by 119,000, easily surpassing the consensus estimates of 50,000. While the unemployment rate ticked up to 4.4% and wage growth slowed slightly, the data suggest the U.S. economy remains on a firm footing. While this resilience made some investors unsure of the Fed's December rate decision, the market welcomed the news, rallying on the strength of a solid economy and a booming tech sector.
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:
- Energy Products and Services company FTAI Infrastructure (NASDAQ: FIP) jumped 6%. Is now the time to buy FTAI Infrastructure? Access our full analysis report here, it’s free for active Edge members.
- Construction and Maintenance Services company WillScot Mobile Mini (NASDAQ: WSC) jumped 4.7%. Is now the time to buy WillScot Mobile Mini? Access our full analysis report here, it’s free for active Edge members.
- Engineering and Design Services company Dycom (NYSE: DY) jumped 5.4%. Is now the time to buy Dycom? Access our full analysis report here, it’s free for active Edge members.
- Automobile Manufacturing company Rivian (NASDAQ: RIVN) jumped 5.1%. Is now the time to buy Rivian? Access our full analysis report here, it’s free for active Edge members.
Zooming In On FTAI Infrastructure (FIP)
FTAI Infrastructure’s shares are extremely volatile and have had 46 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 1.8% on the news that concerns regarding lofty artificial intelligence valuations triggered a pullback in the technology sector. Nvidia slid 3% ahead of its earnings report, dragging down fellow "Magnificent Seven" peers despite a major partnership announcement with Anthropic, as investors increasingly question the durability of the AI rally. Market sentiment was further dampened by Bitcoin dropping below $90,000, signaling reduced risk appetite, and growing anxiety that the Federal Reserve may pause rate cuts in December, with the implied probability of a cut falling to roughly 50%. Adding to the weakness, Home Depot shares declined following an earnings miss and a cut to its full-year outlook. This combination of continued de-risking and valuation skepticism put the S&P 500 on pace for its fourth consecutive daily decline.
FTAI Infrastructure is down 42.8% since the beginning of the year, and at $4.16 per share, it is trading 53.3% below its 52-week high of $8.92 from November 2024. Investors who bought $1,000 worth of FTAI Infrastructure’s shares at the IPO in July 2022 would now be looking at an investment worth $1,387.
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