China’s e-commerce giant, JD (JD), posted a 22.4% Y/Y increase in revenue. Yet shares dropped from around $32.50 to as low as around $31.33 on August 14.
Investors continue to distrust China-based companies. Optimistic holders mistakenly compare JD to a U.S.-based company like Amazon (AMZN) or eBay (EBAY). They reason that the stock should trade at $90. JD will need to buy more than $1.5 billion out of the $5 billion allocated for share buyback. It also needs to develop its food delivery business model.
Cisco Systems (CSCO) posted good Q1 results on August 13. But the stock fell from over $70 to close at $66.20 last week. Its Q1 guidance of up to $14.85 billion is close to consensus. FY 2026 revenue of up to $60.0 billion is above the $56.6 billion consensus estimate.
Stock markets are not appreciating CSCO stock. They should ignore the HSBC downgrade, which cited valuation fears.
Coherent (COHR) fell by 19% last week after posting results. Investors wanted a stronger first-quarter guidance. Instead, the revenue and earnings expectations are below consensus.
Coherent trades at a premium, yet its long-term prospects are strong. Expect a rough one or two quarters of underperformance. Revenue momentum will improve by next year, rewarding patient investors.
