What Happened?
A number of stocks jumped in the afternoon session after the market experienced a sharp sector rotation, as investors fled growth-oriented technology stocks and piled into value-oriented names amid growing valuation concerns.
This divergence was stark: the tech-heavy Nasdaq struggled, losing 0.2%, while the Dow rallied. This shift away from tech was triggered by a series of negative catalysts in the AI sector. AI cloud provider CoreWeave slid on disappointing guidance, while chip darling Nvidia pulled back after SoftBank sold its stake. This "hurt the AI trade," dragging down related names like Micron and Oracle. As capital left tech, it sought safety in "higher quality" defensive names. Health care giants like Merck, Amgen, and Johnson & Johnson saw significant buying, boosting the Dow.
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:
- Branded Pharmaceuticals company Pfizer (NYSE: PFE) jumped 4.1%. Is now the time to buy Pfizer? Access our full analysis report here, it’s free for active Edge members.
- Generic Pharmaceuticals company Amneal (NASDAQ: AMRX) jumped 4%. Is now the time to buy Amneal? Access our full analysis report here, it’s free for active Edge members.
- Specialty Pharmaceuticals company Jazz Pharmaceuticals (NASDAQ: JAZZ) jumped 2.8%. Is now the time to buy Jazz Pharmaceuticals? Access our full analysis report here, it’s free for active Edge members.
- Surgical Equipment & Consumables - Diversified company BD (NYSE: BDX) jumped 3.4%. Is now the time to buy BD? Access our full analysis report here, it’s free for active Edge members.
- Outpatient & Specialty Care company DaVita (NYSE: DVA) jumped 2.7%. Is now the time to buy DaVita? Access our full analysis report here, it’s free for active Edge members.
Zooming In On Pfizer (PFE)
Pfizer’s shares are not very volatile and have only had 4 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be 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 gained 7.2% on the news that the company announced a landmark agreement with the U.S. government aimed at lowering prescription drug prices for American patients.
The historic pact includes several key measures. Pfizer will voluntarily align prices for its drugs in Medicaid programs with those in other developed countries, a policy referred to as 'most-favored-nation' pricing. Additionally, the company will offer medicines directly to consumers at significant discounts—averaging 50%—through a new government-operated website, TrumpRx.gov. In return for these pricing concessions and a commitment to invest $70 billion in U.S. research and manufacturing, Pfizer secured a three-year grace period from potential tariffs. The market reacted positively, as the voluntary agreement is seen as a way for the pharmaceutical industry to avoid stricter legislation and removes a major policy uncertainty that has weighed on the sector.
Pfizer is down 4.2% since the beginning of the year, but at $25.48 per share, it is still trading close to its 52-week high of $27.37 from October 2025. Investors who bought $1,000 worth of Pfizer’s shares 5 years ago would now be looking at an investment worth $661.95.
P.S. In tech investing, "Gorillas" are the rare companies that dominate their markets—like Microsoft and Apple did decades ago. Today, the next Gorilla is emerging in AI-powered enterprise software. Access the ticker here in our special report.
