What Happened?
A number of stocks fell in the afternoon session after investor apprehension intensified ahead of a key policy speech and perplexing inflation signals clouded the economic outlook, leading to a wider market retreat from growth-oriented stocks.
The downturn in the market was largely attributed to a significant sell-off in megacap tech and chipmaker shares. Nvidia, Advanced Micro Devices (AMD), and Broadcom all saw notable drops, dragging down the VanEck Semiconductor ETF. Other major tech-related companies like Tesla, Meta Platforms, and Netflix were also under pressure. A key reason for this trend is that much of the recent market gains have been concentrated in the "AI trade," which includes these large technology and semiconductor companies. So this could also mean that some investors are locking in some gains ahead of more definitive feedback from the Fed.
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:
- Online Marketplace company eHealth (NASDAQ:EHTH) fell 3.1%. Is now the time to buy eHealth? Access our full analysis report here, it’s free.
- Gig Economy company Lyft (NASDAQ:LYFT) fell 3.1%. Is now the time to buy Lyft? Access our full analysis report here, it’s free.
- Consumer Subscription company Coursera (NYSE:COUR) fell 3.5%. Is now the time to buy Coursera? Access our full analysis report here, it’s free.
- Online Marketplace company Cars.com (NYSE:CARS) fell 4.1%. Is now the time to buy Cars.com? Access our full analysis report here, it’s free.
- Video Gaming company Skillz (NYSE:SKLZ) fell 4.3%. Is now the time to buy Skillz? Access our full analysis report here, it’s free.
Zooming In On Skillz (SKLZ)
Skillz’s shares are extremely volatile and have had 44 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 11 days ago when the stock gained 11.2% on the news that the company reported strong second-quarter 2025 financial results that beat Wall Street's expectations for both revenue and earnings. The mobile gaming platform posted revenue of $27.37 million, an 8.2% increase year-over-year, which surpassed analyst estimates by nearly 20%. A key highlight was the 19.7% growth in paying monthly active users compared to the prior year, reaching 146,000. While the company still recorded a net loss, its GAAP loss per share of $0.58 was significantly better than the loss of $1.34 that analysts had anticipated. The strong top-line and user growth figures suggested that the company's strategies to attract players were gaining traction, but a 9.5% decline in average revenue per user indicated challenges remain in fully monetizing its user base.
Skillz is up 61.4% since the beginning of the year, and at $8.60 per share, it is trading close to its 52-week high of $9.09 from August 2025. Investors who bought $1,000 worth of Skillz’s shares 5 years ago would now be looking at an investment worth $41.51.
Unless you’ve been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) semiconductor stock benefiting from the rise of AI. Click here to access our free report on our favorite semiconductor growth story.