TLDR
- Reddit will join the S&P 500 on August 18, replacing AvalonBay Communities
- Applied Materials fell around 5% despite beating earnings and revenue estimates
- Sandisk rose over 4% after J.P. Morgan resumed coverage with an Overweight rating
- Nu Holdings jumped 9% after reporting 56% year-over-year revenue growth
- Globant dropped 13% after missing earnings estimates and cutting its revenue outlook
Reddit’s addition to the S&P 500 was the biggest market story on Friday, August 14. The social media company will officially join the index before trading opens on August 18.
Reddit is replacing AvalonBay Communities, which is being acquired by Equity Residential. The combined company will continue in the S&P 500 under the new name Vivmark Residential.
Reddit shares surged 12% on the news. Being added to the S&P 500 typically drives demand from index funds that track the benchmark.
Applied Materials Falls Despite Beating Estimates
Applied Materials reported strong third-quarter results but still saw its stock drop around 5%. Revenue rose 25% year-over-year to $9.12 billion, topping Wall Street’s estimate of $9.02 billion.
Adjusted earnings per share came in at $3.50, beating the $3.42 estimate. The company also gave fourth-quarter guidance above consensus, with a revenue midpoint of $10.25 billion versus the expected $9.55 billion.
Management raised its semiconductor systems revenue outlook for 2026, pointing to AI-driven demand and stronger visibility into 2027.
Despite all of that, investors sold the stock. Applied Materials had already gained nearly 98% year-to-date, so some traders appeared to be expecting a bigger upside surprise. The company also disclosed a $220 million unrealized investment loss during the quarter.
Sandisk climbed over 4% in premarket trading after J.P. Morgan resumed coverage with an Overweight rating and a price target of $2,250.
Nu Holdings Posts Strong Quarter
Nu Holdings, the Brazilian digital bank, jumped 9% after a strong second quarter. Revenue rose 56% year-over-year to $5.88 billion, well above the $5.48 billion consensus estimate.
Earnings per share came in at $0.22 on a GAAP basis, topping the $0.19 estimate. Net interest income jumped 65% year-over-year to $3.69 billion.
Nu added 4 million customers during the quarter, bringing its total to 139 million. Monthly average revenue per active customer rose to $17.10 from $12.50 a year earlier.
Globant had a rough day, dropping 13% after the digital transformation company reported adjusted earnings below expectations and warned of continued pressure on revenue growth.
Globant now expects full-year 2026 revenue of $2.428 billion to $2.462 billion, which could range from a 1.1% decline to just 0.3% growth.
Several AI-related stocks moved higher. Intel, Marvell, and Micron all posted gains of between 1% and 2% in premarket trading.
Defense and drone stocks also rose after the Trump administration announced tariffs on drone imports. Unusual Machines, Ondas, Kratos, and AeroVironment all climbed.
Stock futures were little changed overall as investors continued to weigh cooling inflation data following Thursday’s lower-than-expected wholesale inflation report.
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