Software Stocks Falter on Guidance While Gap, Affirm Surge After-Hours

Several major technology and retail stocks saw significant price swings in after-hours trading Thursday, as investors looked past solid quarterly earnings to scrutinize forward-looking guidance and lofty valuations.

Software Stocks Slide on Tepid Outlooks

Enterprise software companies faced pressure despite beating Wall Street expectations for the recent quarter, as future forecasts disappointed investors.

• Workday (WDAY) shares dropped 5% after the company posted a fiscal second-quarter beat. Investor sentiment soured on its Q3 subscription revenue guidance, which pointed to a modest deceleration in growth.
• Autodesk (ADSK) fell 6%. While the design software maker delivered a solid top- and bottom-line beat, its full-year EPS guidance came in at the midpoint below analysts’ consensus, raising concerns about its near-term outlook.
• SentinelOne (S) slid 3% after the cybersecurity vendor issued downbeat full-year guidance, citing competitive pricing pressures and elongated deal-closing cycles that are limiting margin expansion.

Profit-Taking Hits Chip and Data Stocks

Profit-taking and high expectations weighed on other corners of the tech sector, even after some companies delivered strong results and raised their forecasts.

Ad

Rubrik (RBRK) shares tumbled 10% in a classic "sell-the-news" reaction. The cloud data security company delivered a massive Q2 earnings beat and raised its full-year sales guidance, but the stock pulled back as investors took profits following a 30% year-to-date run-up.

Marvell Technology (MRVL) fell 2% following its Q2 release. The chipmaker issued strong Q3 revenue guidance driven by booming demand for its custom AI products, but its in-line earnings per share targets prompted some short-term profit-taking.

Retail and Fintech See Post-Earnings Surge

In contrast, the consumer and fintech sectors produced some of the evening's biggest gainers, driven by strong performance and optimistic forecasts.

• Affirm Holdings (AFRM) shares surged after the buy-now-pay-later platform crushed fiscal Q4 expectations, reporting an EPS of $4.62, far outpacing the $0.85 analyst consensus. The firm also issued strong revenue guidance for the upcoming quarter.
• The Gap, Inc. (GAP) stock jumped 9% after beating second-quarter earnings and issuing upbeat full-year EPS guidance, signaling that its turnaround efforts across key brands are gaining traction.
• Ulta Beauty (ULTA) rose 2% after a solid Q2 beat and a reaffirmation of its full-year outlook, reassuring investors that demand in the prestige beauty category remains resilient.