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Luke Kawa

Retail traders are driving off-the-charts volatility when companies release earnings

The increasing prominence of retail traders in dictating price action isn’t confined to just the world of meme stocks.

They’re also playing a key role in fueling how companies’ share prices behave at a time when every investor’s eyes are on them: upon the release of quarterly results.

“During this 2Q earnings season, retail investors frequently exhibited outsized trading behavior in stocks that experienced significant post-earnings price movements,” JPMorgan strategists led by Arun Jain wrote.

That is, substantial retail activity is associated with massive earnings reactions. The y-axis in the below chart tracks how many standard deviations JPM’s measure of retail buying is above or below its one-year average for a given stock.

JPM Retail Earnings Reaction
Source: JPMorgan

But it’s not always the case that retail is contributing to (or creating) the obvious trend in response to earnings. Sometimes the crowd is coming in with both hands to catch a falling knife in stocks that nosedived after reporting quarterly results.

While retail’s favorite name to buy was still Palantir over the last week, per JPMorgan, Eli Lilly, The Trade Desk, and CoreWeave jumped to near the top of the leaderboard as they seemingly “provided compelling ‘buy-the-dip’ opportunities following disappointing announcements.”

LLY TTD retail buying

As this has been playing out, Bespoke Investment Group observed that the typical (over?)reaction to earnings reports has been trending higher, reaching levels unseen outside of the global financial crisis.

Bespoke Earnings Reaction
Source: Bespoke Investment Group


“In the current day and age of easy, commission-free trading on brokerage apps available right on your smartphone, share-price volatility in reaction to stock-specific earnings news has moved increasingly higher,” analysts at Bespoke wrote. “At the same time, overall market volatility hasn’t seen a similar increase, which means that more and more of a stock’s overall performance is coming from the one trading day per quarter when it posts its financial results and forward guidance.”

So, in sum, retail traders are stepping up their activity in names that move on earnings at the same time that stocks are moving more than they used to on earnings!

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Nate Becker

DraftKings drops after issuing downbeat 2026 sales, profit forecasts

DraftKings plunged after the sports betting company gave downbeat guidance for the current year.

Shares were down 15% in recent after-hours trading.

It forecast: 

  • Revenue between $6.5 billion and $6.9 billion, compared with analysts’ estimates of $7.29 billion, according to FactSet. 

  • Adjusted EBITDA of $700 million to $900 million, compared with estimates of $981 million.

For the fourth quarter, DraftKings posted: 

  • Revenue of $1.99 billion, in line with Wall Street’s $1.99 billion expectation 

  • Earnings per share of $0.25, compared with a consensus estimate of $0.09. 

DraftKings Reports Fourth Quarter Revenue Growth of 43% | DraftKings Inc.

DraftKings Reports Fourth Quarter Revenue Growth of 43% | DraftKings Inc.

It forecast: 

  • Revenue between $6.5 billion and $6.9 billion, compared with analysts’ estimates of $7.29 billion, according to FactSet. 

  • Adjusted EBITDA of $700 million to $900 million, compared with estimates of $981 million.

For the fourth quarter, DraftKings posted: 

  • Revenue of $1.99 billion, in line with Wall Street’s $1.99 billion expectation 

  • Earnings per share of $0.25, compared with a consensus estimate of $0.09. 

markets
Max Knoblauch

Rivian climbs after posting better-than-expected Q4 results; sees R2 SUV hitting the market in Q2

EV maker Rivian reported its fourth-quarter and full-year earnings results after markets closed on Thursday. Its shares climbed 13% in after-hours trading.

In the fourth quarter, which coincided with the end of federal EV tax credits in the US, Rivian booked $1.29 billion in revenue, down 26% year over year but above analysts’ expectations of $1.26 billion. The company posted an adjusted loss of $0.54 per share in Q4, compared to the expected loss of $0.68 per share.

Rivian forecast full-year adjusted losses in the range of $1.8 billion to $2.1 billion, compared to the $1.75 billion loss expected by Wall Street.

2026 is set to be a big year for the company, with its upcoming $45,000 R2 SUV planned to begin deliveries in the second quarter. Rivian issued full-year delivery guidance of between 62,000 and 67,000 vehicles, compared to Wall Street’s expectations of 65,700. Analysts polled by FactSet expect 14,700 of those 2026 deliveries to be R2s. Last year, Rivian delivered 42,247 vehicles.

“It’s incredibly exciting to see the early strong reviews of the R2 pre-production builds, and we can’t wait to get them to our customers next quarter,” CEO RJ Scaringe said.

markets
Matt Phillips

Arista Networks soars as it beats on Q4 EPS and revenue, gives upbeat sales guidance

Arista Networks, which sells equipment and software used to run and monitor data center networks, reported better-than-expected fourth-quarter earnings and sales after the close of trading on Thursday.

Arista shares were up about 9% in the after-hours session.

Here’s what the switch and router maker reported:

  • Adjusted earnings per share of $0.82 vs. Wall Street expectations for $0.76, according to FactSet.

  • Sales of $2.49 billion vs. an expected $2.38 billion, per FactSet data.

  • A non-GAAP Q4 gross margin, a measure of how profitable a company’s core products are to produce, of 63.4% vs. previous guidance of 62% to 63%.

  • Guidance for Q1 sales of approximately $2.6 billion vs. the $2.46 billion expected on Wall Street.

  • Guidance for a Q1 non-GAAP gross margin of between 62% and 63% vs. the 63% FactSet forecast.

markets
Matt Phillips

Coinbase posts record stablecoin revenue but falls short of expectations for Q4 sales

Shares of cryptocurrency exchange Coinbase jumped after-hours on Thursday after the company reported record stablecoin revenue, despite Q4 revenue numbers that missed Wall Street expectations. 

The stock was up 3.1% in recent trading.

  • Revenue came in at $1.78 billion vs. the $1.81 billion consensus analyst expectation, per FactSet.

  • Transaction revenue was $982.7 million vs. a $998 million forecast.

  • The company reported adjusted earnings per share of $0.66, compared with $3.37 a year earlier.

  • Stablecoin revenue hit a record $364.1 million, up 61% from the same quarter the previous year.

Earlier Thursday, Coinbase seemingly suffered an outage, saying it was “aware that customers may be unable to buy, sell, transfer on Coinbase.com at this time,” but noting that “your funds are safe.” The company said the issue was resolved just over an hour later.

Coinbase shares — which were added to the S&P 500 last May — have been crushed by the downturn in crypto this year. Through Wednesday’s close, the stock was down by more than 30% in 2026. And that was before the stock caught a double downgrade on Thursday before the report.

Luke Kawa
2h
Applied Materials jumps after posting better-than-expected Q1 results, strong Q2 outlook

The semicap company just reported its Q1 results.

Applied Materials campus in Silicon Valley

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