What Happened?
A number of stocks fell in the afternoon session after Federal Reserve Chair Jerome Powell signaled a cautious stance on future monetary policy decisions during a speech in Chicago, emphasizing that trade tariffs could add upward pressure to inflation in the short term and complicate the Fed's efforts to stabilize the economy. He warned that such trade measures are "likely to move us further away from our goals," referring to the Fed's dual mandate of price stability and maximum employment.
The comments did little to improve sentiment, as major indices were already in the negative territory in the morning session after Nvidia announced it might be unable to sell some high-end chips (including the H20 chips) to China due to export controls and requirements from the Trump administration. As a result, the company planned to take a $5.5 billion charge due to inventory writedowns and canceled sales. Adding to the sector's pressure, chip tool maker ASML posted weak bookings (a key demand indicator) which fell below Wall Street's expectations, noting that tariffs had made the industry's outlook more uncertain.
Taken together, these updates likely fueled investor anxiety, amplifying concerns about global trade tensions, tech sector vulnerability, and the Fed's limited room to maneuver in an increasingly uncertain macro environment.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, following stocks were impacted:
- Electrical Systems company Powell (NASDAQ: POWL) fell 5.4%. Is now the time to buy Powell? Access our full analysis report here, it’s free.
- Waste Management company Quest Resource (NASDAQ: QRHC) fell 8%. Is now the time to buy Quest Resource? Access our full analysis report here, it’s free.
- Aerospace company AerSale (NASDAQ: ASLE) fell 5.5%. Is now the time to buy AerSale? Access our full analysis report here, it’s free.
- Project Management Software company Asana (NYSE: ASAN) fell 6%. Is now the time to buy Asana? Access our full analysis report here, it’s free.
- Online Retail company Wayfair (NYSE: W) fell 7.8%. Is now the time to buy Wayfair? Access our full analysis report here, it’s free.
Zooming In On Quest Resource (QRHC)
Quest Resource’s shares are very volatile and have had 26 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 biggest move we wrote about over the last year was about 1 month ago when the stock dropped 32.2% on the news that the company reported weak fourth-quarter 2024 results as revenue barely grew, missing expectations, and EBITDA declined significantly.
The real story was the sharp drop in profitability, with adjusted EBITDA falling by more than half compared to the previous year, weighed down by higher costs, client attrition, and weaker demand in industrial end markets. With earnings pressure mounting, the company announced a 15% workforce reduction and an annualized $3 million cut in operating expenses. The company also named Perry Moss as CEO, signaling a shift in leadership. Overall, this was a disappointing quarter with little revenue growth and weaker earnings.
Quest Resource is down 67.5% since the beginning of the year, and at $2.07 per share, it is trading 80.6% below its 52-week high of $10.66 from May 2024. Investors who bought $1,000 worth of Quest Resource’s shares 5 years ago would now be looking at an investment worth $1,511.
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