What Happened?
A number of stocks jumped in the afternoon session after comments from a key Federal Reserve official bolstered hopes for an interest rate cut. New York Federal Reserve President John Williams stated he sees “room for a further adjustment” in the near term, sparking a significant market rally. Following his remarks, the probability of the central bank cutting rates at its December meeting jumped from 39% to over 73%, according to the CME FedWatch tool. This positive sentiment provided relief to markets amid concerns over high valuations, particularly in AI-related stocks.
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:
- Consumer Subscription company Bumble (NASDAQ: BMBL) jumped 3.6%. Is now the time to buy Bumble? Access our full analysis report here, it’s free for active Edge members.
- Consumer Subscription company Coursera (NYSE: COUR) jumped 3.7%. Is now the time to buy Coursera? Access our full analysis report here, it’s free for active Edge members.
Zooming In On Coursera (COUR)
Coursera’s shares are very volatile and have had 20 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 28 days ago when the stock dropped 12.9% on the news that its weak fourth-quarter profitability forecast overshadowed an otherwise strong third-quarter earnings report. The company surpassed market expectations for its third quarter, reporting revenue of $194.2 million and an adjusted EPS of $0.10, both beating analyst estimates. Additionally, Coursera's revenue guidance for the upcoming fourth quarter was better than expected at $191 million at the midpoint. However, investors focused on the company's weaker outlook for profitability. Coursera's guidance for fourth-quarter adjusted EBITDA, a key measure of profitability, was $8.5 million at the midpoint, well below the consensus estimate of $10.17 million. This shortfall suggested potential pressure on margins, spooking investors and leading to a significant sell-off despite the positive top-line performance.
Coursera is down 3.7% since the beginning of the year, and at $8.17 per share, it is trading 35.7% below its 52-week high of $12.70 from August 2025. Investors who bought $1,000 worth of Coursera’s shares at the IPO in March 2021 would now be looking at an investment worth $181.56.
The 1999 book Gorilla Game predicted Microsoft and Apple would dominate tech before it happened. Its thesis? Identify the platform winners early. Today, enterprise software companies embedding generative AI are becoming the new gorillas. Click here for access to our special report that reveals one profitable leader already riding this wave.
