What Happened?
A number of stocks fell in the afternoon session after investors continued to question how much more the superstar stocks can add to their already spectacular gains.
The main story? Investors are cashing in on a good run and feeling a bit cautious. After a fantastic run, many of those high-flying AI and technology stocks saw investors take profits: selling shares to lock in their gains. This is often called a "market rotation." Money is moving out of the red-hot tech sector (which some worry has become too expensive) and into other parts of the market that investors may currently deem more stable or reasonably-priced.
There's a secondary reason for the cautious mood: The long government shutdown came to an end. Though it's typically interpreted as good news, it also means a flood of delayed economic reports will be released. For weeks, investors were "flying blind" without key updates on the economy's health, like inflation data and the jobs report. In typical "sell the news" fashion, investors may also be taking profits and selling in anticipation that the new data would potentially give the Federal Reserve reasons to slow or even pause future rate cuts.
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:
- Terrestrial Telecommunication Services company Lumen (NYSE:LUMN) fell 4.4%. Is now the time to buy Lumen? Access our full analysis report here, it’s free for active Edge members.
- Electronic Components & Manufacturing company Jabil (NYSE:JBL) fell 6.1%. Is now the time to buy Jabil? Access our full analysis report here, it’s free for active Edge members.
- Specialized Technology company Mirion (NYSE:MIR) fell 7.7%. Is now the time to buy Mirion? Access our full analysis report here, it’s free for active Edge members.
- Data & Business Process Services company Planet Labs (NYSE:PL) fell 9.6%. Is now the time to buy Planet Labs? Access our full analysis report here, it’s free for active Edge members.
- Terrestrial Telecommunication Services company Cogent (NASDAQ:CCOI) fell 9.1%. Is now the time to buy Cogent? Access our full analysis report here, it’s free for active Edge members.
Zooming In On Planet Labs (PL)
Planet Labs’s shares are extremely volatile and have had 62 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 20 days ago when the stock gained 5.5% on the news that several analysts raised their price targets for the company, citing its improving financial health. Specifically, analysts from Northland Securities, Needham, and Deutsche Bank all reiterated their "buy" ratings on the stock and increased their price targets to $16. This confidence appeared to be rooted in the company's strong performance metrics. Planet Labs recorded superb annual revenue growth of 22.3% over the last five years, indicating it gained market share. Furthermore, the company's free cash flow profile moved into positive territory during that period, a key sign that it achieved financial self-sustainability.
Planet Labs is up 179% since the beginning of the year, but at $11.10 per share, it is still trading 29.2% below its 52-week high of $15.68 from October 2025. Investors who bought $1,000 worth of Planet Labs’s shares at the IPO in April 2021 would now be looking at an investment worth $1,121.
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