What Happened?

A number of stocks fell in the afternoon session after investors continued to question how much more the superstar stocks can add to their already spectacular gains. 

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:

• Electronic Components & Manufacturing company Knowles (NYSE: KN) fell 2.7%. Is now the time to buy Knowles? Access our full analysis report here, it’s free for active Edge members.
• IT Distribution & Solutions company Ingram Micro (NYSE: INGM) fell 3.1%. Is now the time to buy Ingram Micro? Access our full analysis report here, it’s free for active Edge members.
• Specialized Technology company Zebra (NASDAQ: ZBRA) fell 3.1%. Is now the time to buy Zebra? Access our full analysis report here, it’s free for active Edge members.

Zooming In On Ingram Micro (INGM)

Ingram Micro’s shares are somewhat volatile and have had 12 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 13 days ago when the stock gained 5.2% on the news that the company reported mixed third-quarter results but provided an optimistic revenue forecast for the upcoming quarter. The company's sales for the quarter grew 7.2% year-over-year to $12.6 billion, surpassing Wall Street's expectations of $12.24 billion. 

Furthermore, Ingram Micro issued strong revenue guidance for its fourth quarter, projecting sales of around $14.18 billion at the midpoint, which was well ahead of the $13.68 billion analysts had anticipated. While the revenue figures were strong, the company's GAAP earnings per share of $0.42 fell just short of the consensus estimate of $0.44. However, adjusted EBITDA, a measure of a company's operating performance, came in at $342.2 million, beating expectations by 6.9%. Investors appeared to focus on the strong top-line performance and encouraging outlook, overlooking the slight earnings miss.

Ingram Micro is up 4.3% since the beginning of the year, but at $20.66 per share, it is still trading 16.3% below its 52-week high of $24.67 from February 2025. Investors who bought $1,000 worth of Ingram Micro’s shares at the IPO in October 2024 would now be looking at an investment worth $839.72.

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