What Happened?
A number of stocks jumped in the afternoon session after the technology sector rallied, pushing the Nasdaq near all-time highs, as investors cheered a potential de-escalation of geopolitical tensions in the Middle East amid a flurry of positive news in the artificial intelligence space.
The broader market sentiment was lifted by expectations of a resolution to the U.S.-Iran conflict, which helped the S&P 500 cross the 7,000 mark. However, the tech sector saw particularly strong performance, driven by excitement around AI.
Underscoring this trend, reports emerged that Uber is investing over $10 billion to acquire a fleet of autonomous vehicles. This move signals a major strategic shift for the company and highlights the massive capital flowing into AI-driven technologies, boosting confidence across the industry and affecting related players like Alphabet's Waymo and Tesla.
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:
- Consumer Subscription company Coursera (NYSE: COUR) jumped 3.3%. Is now the time to buy Coursera? Access our full analysis report here, it’s free.
- Social Networking company Yelp (NYSE: YELP) jumped 3.3%. Is now the time to buy Yelp? Access our full analysis report here, it’s free.
Zooming In On Yelp (YELP)
Yelp’s shares are not very volatile and have only had 9 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 2 months ago when the stock dropped 11.2% on the news that the company provided a weak sales and profit forecast for the full year 2026, which overshadowed its fourth-quarter results that beat some market estimates.
For the upcoming year, Yelp's revenue guidance of $1.47 billion at the midpoint fell 2.8% short of analyst expectations, and its adjusted EBITDA forecast of $320 million also missed consensus estimates. This disappointing outlook weighed on investor sentiment despite some bright spots in the fourth quarter. For the quarter, the company reported flat year-over-year revenue of $360 million, which was in line with expectations. However, it did report an adjusted EBITDA of $85.7 million and earnings per share of $0.61, both of which came in ahead of Wall Street estimates.
Yelp is down 10.3% since the beginning of the year, and at $27.08 per share, it is trading 33.8% below its 52-week high of $40.93 from May 2025. Investors who bought $1,000 worth of Yelp’s shares 5 years ago would now be looking at only $670.63.
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