What Happened?

A number of stocks fell in the afternoon session after the major indices continued to pull back, with technology stocks accounting for most of the market's largest decliners. A key reason for this trend is that much of the recent market gains were 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. 

Despite the downturn, some analysts viewed this as an opportunity to own some of the "Core AI winners." Dan Ives of Wedbush Securities commented, "In our view, the tech bull cycle will be well intact for at least another 2-3 years, given the trillions being spent on AI infrastructure/software/chips/power/apps looking ahead. This remains our tech playbook and investor roadmap." Additionally, mixed earnings reports from retailers, such as Target, have added to the market's weakness. Investors are closely monitoring these reports for insights into the broader economic health and the potential impact of new tariffs on inflation.

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:

• Modern Fast Food company Noodles (NASDAQ: NDLS) fell 5.8%. Is now the time to buy Noodles? Access our full analysis report here, it’s free.
• Healthcare Technology for Patients company GoodRx (NASDAQ: GDRX) fell 7.7%. Is now the time to buy GoodRx? Access our full analysis report here, it’s free.
• Memory Semiconductors company Micron (NASDAQ: MU) fell 5.8%. Is now the time to buy Micron? Access our full analysis report here, it’s free.
• Specialty Equipment Distributors company Custom Truck One Source (NYSE: CTOS) fell 4.9%. Is now the time to buy Custom Truck One Source? Access our full analysis report here, it’s free.
• Vehicle Retailer company CarMax (NYSE: KMX) fell 4.3%. Is now the time to buy CarMax? Access our full analysis report here, it’s free.

Zooming In On GoodRx (GDRX)

GoodRx’s shares are very volatile and have had 29 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 2 days ago when the stock gained 40.2% on the news that the company announced a collaboration with pharmaceutical giant Novo Nordisk to offer the popular medications Ozempic and Wegovy for $499 per month to eligible self-paying customers. This landmark collaboration makes the popular GLP-1 medications—used for type 2 diabetes (Ozempic) and weight loss (Wegovy)—available at a significantly lower cost to those who lack adequate insurance coverage. According to the announcement, this marks the first time Ozempic has been offered at this self-pay price point. The offer is effective immediately and available through the GoodRx platform at over 70,000 retail pharmacies nationwide. Investors reacted positively, viewing the strategic partnership as a pivotal move that could substantially expand GoodRx's market reach and user base by capitalizing on the high-demand therapeutic category.

GoodRx is down 3.6% since the beginning of the year, and at $4.40 per share, it is trading 48.8% below its 52-week high of $8.59 from August 2024. Investors who bought $1,000 worth of GoodRx’s shares at the IPO in September 2020 would now be looking at an investment worth $87.03.

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.