What Happened?

A number of stocks fell in the afternoon session after the major indices pulled back (Nasdaq -1.3%, S&P 500 -1.1%) as Israel carried out significant strikes on Iranian nuclear and military sites, dramatically escalating fears of a broader conflict in the Middle East. This development has sent crude oil prices surging, as investors fear potential disruptions to global oil supply and a wider regional conflict. 

The conflict intensified market anxiety, compounding volatility, especially in risk assets like stocks, and prompting a pronounced shift toward safe-haven assets.

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:

• Analog Semiconductors company Sensata Technologies (NYSE: ST) fell 5.1%. Is now the time to buy Sensata Technologies? Access our full analysis report here, it’s free.
• Data Analytics company Amplitude (NASDAQ: AMPL) fell 5%. Is now the time to buy Amplitude? Access our full analysis report here, it’s free.
• Semiconductor Manufacturing company Entegris (NASDAQ: ENTG) fell 5.3%. Is now the time to buy Entegris? Access our full analysis report here, it’s free.
• Online Marketplace company ACV Auctions (NYSE: ACVA) fell 5.6%. Is now the time to buy ACV Auctions? Access our full analysis report here, it’s free.
• Apparel Retailer company American Eagle (NYSE: AEO) fell 5.4%. Is now the time to buy American Eagle? Access our full analysis report here, it’s free.

Zooming In On ACV Auctions (ACVA)

ACV Auctions’s shares are quite volatile and have had 15 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 biggest move we wrote about over the last year was 4 months ago when the stock dropped 9.2% on the news that the company reported weak fourth-quarter results, and provided full-year revenue and EBITDA guidance below Wall Street's estimates. The outlook assumed a flat dealer wholesale market, which might limit upside potential in the near term. In addition, margins deteriorated, and the company burned cash during the quarter. 

On the other hand, ACVA blew past analysts' EBITDA expectations this quarter. It also expanded its number of units sold, leading to a revenue beat. Still, this was a softer quarter due to the outlook.

ACV Auctions is down 26.6% since the beginning of the year, and at $15.37 per share, it is trading 33.7% below its 52-week high of $23.17 from December 2024. Investors who bought $1,000 worth of ACV Auctions’s shares at the IPO in March 2021 would now be looking at an investment worth $491.68.

Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we’ve identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI, available to you FREE via this link.