What Happened?
A number of stocks jumped in the afternoon session after the major indices rebounded, as Fed Chair Jerome Powell delivered dovish remarks at the much-awaited Jackson Hole symposium. Powell suggested that with inflation risks moderating and unemployment remaining low, the Federal Reserve might consider a shift in its monetary policy stance, including potential interest rate cuts. This outlook eased market concerns about prolonged high interest rates and their impact on economic growth. The prospect of lower borrowing costs bolstered investor confidence, particularly in sectors that have lagged, leading to a broad rally across the market.
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:
- Real Estate Services company Offerpad (NYSE:OPAD) jumped 14.2%. Is now the time to buy Offerpad? Access our full analysis report here, it’s free.
- Diversified Financial Services company NCR Atleos (NYSE:NATL) jumped 5.1%. Is now the time to buy NCR Atleos? Access our full analysis report here, it’s free.
- Diversified Financial Services company Donnelley Financial Solutions (NYSE:DFIN) jumped 4.7%. Is now the time to buy Donnelley Financial Solutions? Access our full analysis report here, it’s free.
- Personal Loan company Sezzle (NASDAQ:SEZL) jumped 7.6%. Is now the time to buy Sezzle? Access our full analysis report here, it’s free.
- Personal Loan company OneMain (NYSE:OMF) jumped 4.8%. Is now the time to buy OneMain? Access our full analysis report here, it’s free.
Zooming In On Offerpad (OPAD)
Offerpad’s shares are extremely volatile and have had 89 moves greater than 5% over the last year. But moves this big are rare even for Offerpad and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 3 days ago when the stock dropped 4.4% after a broader rally in the real estate technology sector, fueled by renewed 'meme stock' interest and a potential short squeeze. The surge appears to be influenced by its peer, Opendoor Technologies, which has recently gained significant attention as a 'meme stock'—a term for stocks whose prices rise due to hype on online forums rather than fundamentals. High short interest can lead to sharp price spikes as traders betting against the stock are forced to buy, a phenomenon known as a short squeeze. Offerpad's rally is also supported by recent company-specific news.
Offerpad is down 42.6% since the beginning of the year, and at $1.54 per share, it is trading 69.5% below its 52-week high of $5.04 from December 2024. Investors who bought $1,000 worth of Offerpad’s shares at the IPO in December 2020 would now be looking at an investment worth $10.08.
Today’s young investors won’t have 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.