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:
- Custom Parts Manufacturing company 3D Systems (NYSE: DDD) fell 6%. Is now the time to buy 3D Systems? Access our full analysis report here, it’s free.
- Renewable Energy company EVgo (NASDAQ: EVGO) fell 3.1%. Is now the time to buy EVgo? Access our full analysis report here, it’s free.
- Electrical Systems company Sanmina (NASDAQ: SANM) fell 3.9%. Is now the time to buy Sanmina? Access our full analysis report here, it’s free.
- Maintenance and Repair Distributors company VSE Corporation (NASDAQ: VSEC) fell 3.1%. Is now the time to buy VSE Corporation? Access our full analysis report here, it’s free.
- Renewable Energy company FuelCell Energy (NASDAQ: FCEL) fell 4.1%. Is now the time to buy FuelCell Energy? Access our full analysis report here, it’s free.
Zooming In On 3D Systems (DDD)
3D Systems’s shares are extremely volatile and have had 73 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 gained 30.3% on the news that the company reported strong third quarter results with operating profits and earnings per share exceeding Wall Street's estimates.
Revenue for the quarter fell 16.3% year-over-year to $94.84 million, narrowly missing Wall Street's expectations. However, investors looked past the sales decline and focused on the company's profitability. 3D Systems posted an adjusted loss of $0.07 per share, which was significantly better than the consensus analyst estimate of a $0.16 loss per share. Furthermore, its adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization), a measure of operational performance, was a loss of $5.3 million, beating estimates by over 60%. Despite ongoing challenges, including negative free cash flow and long-term revenue declines, the strong bottom-line outperformance suggested to investors that the company's cost management efforts are yielding positive results.
3D Systems is down 38.4% since the beginning of the year, and at $1.97 per share, it is trading 58.3% 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 $362.13.
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