What Happened?
A number of stocks fell in the afternoon session after stocks gave back some of the gains from the previous day as the White House clarified the tariffs on imports from China would add up to 145%, while the baseline 10% tariffs remained in place for all countries. This reminded markets that the global trade environment remained volatile, limiting the potential for sustained gains.
Also, President Trump indicated he was willing to accept pain in the short term, and was aware his policies could cause a recession, but he remained more mindful of a more severe case of economic depression (higher unemployment and prolonged downturn). For investors, this suggested that the administration could prioritize long-term structural shifts over near-term economic stability, further increasing policy-driven risk in the markets.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, following stocks were impacted:
Zooming In On Fluence Energy (FLNC)
Fluence Energy’s shares are extremely volatile and have had 63 moves greater than 5% over the last year. But moves this big are rare even for Fluence Energy and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was about 2 months ago when the stock dropped 48.4% on the news that the company reported underwhelming fourth-quarter results. Revenue missed by more than 50%, due to "the pronounced backend nature of expected revenue for the full year 2025 compared to the revenue distribution seen in the full-year 2024." In addition, full-year revenue guidance was lowered and missed significantly, and EBITDA guidance didn't fare much better when compared to Wall Street's estimates. Overall, this was a challenging quarter.
Fluence Energy is down 76.8% since the beginning of the year, and at $3.92 per share, it is trading 84.7% below its 52-week high of $25.65 from May 2024. Investors who bought $1,000 worth of Fluence Energy’s shares at the IPO in October 2021 would now be looking at an investment worth $112.00.
Today’s young investors likely haven’t read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next .
