What Happened?
Shares of audio technology Sonos company (NASDAQ: SONO) jumped 11.6% in the morning session after continued positive momentum as it reported better-than-expected second-quarter 2025 results that beat revenue and profit forecasts. While revenue declined 13.2% year-over-year to $344.8 million, the figure still topped analyst estimates. The company also posted adjusted earnings per share of $0.19, easily clearing consensus forecasts. The results were highlighted by a significant beat on adjusted EBITDA (a measure of profitability), which came in 45.7% above expectations. Investors were seemingly encouraged by the company's ability to manage costs and outperform on profit despite the drop in sales.
Is now the time to buy Sonos? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Sonos’s shares are quite volatile and have had 18 moves greater than 5% over the last year. But moves this big are rare even for Sonos and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 8 days ago when the stock gained 3.1% on the news that markets rebounded following a sharp sell-off in the previous trading session as weaker-than-expected U.S. jobs data fueled investor hopes for a potential interest rate cut by the Federal Reserve. The July Nonfarm Payrolls report revealed a gain of only 73,000 jobs, significantly below the 110,000 expected. Compounding the news, prior months' figures were revised downward by over 250,000 jobs. This data, indicating a cooling labor market, has led investors to dramatically increase bets on a September interest rate cut by the Federal Reserve, with the probability jumping to over 80% according to the CME FedWatch Tool. The prospect of lower borrowing costs typically stimulates economic activity and boosts consumer spending on non-essential goods and services, which directly benefits companies in the consumer discretionary space.
Sonos is down 12.6% since the beginning of the year, and at $12.88 per share, it is trading 14.6% below its 52-week high of $15.08 from January 2025. Investors who bought $1,000 worth of Sonos’s shares 5 years ago would now be looking at an investment worth $918.36.
Unless you’ve been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) semiconductor stock benefiting from the rise of AI. Click here to access our free report on our favorite semiconductor growth story.
