Markets
markets
Luke Kawa
8/14/25

Retail traders are driving off-the-charts volatility when companies release earnings

The increasing prominence of retail traders in dictating price action isn’t confined to just the world of meme stocks.

They’re also playing a key role in fueling how companies’ share prices behave at a time when every investor’s eyes are on them: upon the release of quarterly results.

“During this 2Q earnings season, retail investors frequently exhibited outsized trading behavior in stocks that experienced significant post-earnings price movements,” JPMorgan strategists led by Arun Jain wrote.

That is, substantial retail activity is associated with massive earnings reactions. The y-axis in the below chart tracks how many standard deviations JPM’s measure of retail buying is above or below its one-year average for a given stock.

JPM Retail Earnings Reaction
Source: JPMorgan

But it’s not always the case that retail is contributing to (or creating) the obvious trend in response to earnings. Sometimes the crowd is coming in with both hands to catch a falling knife in stocks that nosedived after reporting quarterly results.

While retail’s favorite name to buy was still Palantir over the last week, per JPMorgan, Eli Lilly, The Trade Desk, and CoreWeave jumped to near the top of the leaderboard as they seemingly “provided compelling ‘buy-the-dip’ opportunities following disappointing announcements.”

LLY TTD retail buying

As this has been playing out, Bespoke Investment Group observed that the typical (over?)reaction to earnings reports has been trending higher, reaching levels unseen outside of the global financial crisis.

Bespoke Earnings Reaction
Source: Bespoke Investment Group


“In the current day and age of easy, commission-free trading on brokerage apps available right on your smartphone, share-price volatility in reaction to stock-specific earnings news has moved increasingly higher,” analysts at Bespoke wrote. “At the same time, overall market volatility hasn’t seen a similar increase, which means that more and more of a stock’s overall performance is coming from the one trading day per quarter when it posts its financial results and forward guidance.”

So, in sum, retail traders are stepping up their activity in names that move on earnings at the same time that stocks are moving more than they used to on earnings!

More Markets

See all Markets
Luke Kawa
48m
Negative US payroll revisions as bad as 2009 add to fears of consumer spending slowdown

Reconciling the spending versus jobs trends is the key question for US economic analysts.

Yellow traffic light against an office building
markets
Matt Phillips
2h

Planet Labs slips after big post-earnings gain

Smallish midcap satellite imagery and data company Planet Labs is giving back a chunk of the nearly 50% gain it racked up after posting earnings early Monday.

No tears, though: the shares, which seem to have a fairly robust retail following, are still up roughly 340% over the past 12 months.

Retail darling Planet Labs soars on earnings pop for second straight quarter

Retail darling Planet Labs soars on earnings pop for second straight quarter
markets
Luke Kawa
3h

CoreWeave soars as Microsoft’s deal with Nebius shows unrelenting demand for AI compute

CoreWeave is soaring as Microsoft’s $17.4 billion deal with Nebius shows the immense value and continued demand for all parts of the AI data center ecosystem.

One additional reason for CoreWeave’s jump may be that its pending acquisition of AI data center infrastructure company Core Scientific looks like a great deal compared to Microsoft’s renting of (more broad and advanced) AI data center capacity from Nebius.

CoreWeave’s all-stock deal to buy Core Scientific was initially valued at ~$9 billion, but with the subsequent decline in its shares, it’s worth about 40% less. And in purchasing Core Scientific, CoreWeave is saving $10 billion in what it would have paid the company to lease data center infrastructure over the next 12 years.

As it stands, Microsoft is getting about 300 megawatts in data center power capacity from Nebius, while Core Scientific boasts that its footprint is in excess of 1,300 megawatts. So, on the surface, it looks like an absolute steal for CoreWeave.

But again, this is not an apples-to-apples comparison; not all access to AI computing infrastructure is created equal.

There are differences in the type of AI infrastructure provided by the two: Nebius owns GPUs, while Core Scientific doesn’t, and what it provides in the software layer isn’t offered by Core Scientific as a stand-alone entity. This is the difference between the “full stack” approach (Nebius) and a “colocation” approach (Core Scientific).

That being said, CoreWeave’s acquisition of Core Scientific, once completed, will make the combined entity’s business model look more like Nebius’ model, which, as Microsoft just told us, is something that top hyperscalers are willing to pay a pretty penny for.

markets
J. Edward Moreno
4h

UNH rises after preliminary data shows most Medicare Advantage enrollees will be on more lucrative, top-rated plans

UnitedHealth rose more than 4% in premarket trading on Tuesday after the company disclosed that it expects the majority of its Medicare Advantage enrollees will be on plans rated four stars or higher in 2026.

Though the data is only preliminary, about 78% of UNH’s Medicare Advantage members are in plans rated four stars or higher, the company said in a regulatory filing Tuesday morning. On Monday, the company said it plans to reiterate its full-year guidance when it meets with investors this week.

Insurance companies that provide government-sponsored plans, like Medicare Advantage, have struggled this year amid unexpected rising costs. Plans that are rated four stars or higher earn bonus payments and are typically more lucrative for healthcare insurance providers.

Nia Warfield, Luke Kawa
19h
US stocks grind higher as volatility dissipates

The S&P 500 rose 0.2% in what was is fourth-smallest intraday range of 2025, as did the Russell 2000, while the Nasdaq 100 gained 0.5%.

Germany, Bull running on field

Latest Stories

Sherwood Media, LLC produces fresh and unique perspectives on topical financial news and is a fully owned subsidiary of Robinhood Markets, Inc., and any views expressed here do not necessarily reflect the views of any other Robinhood affiliate, including Robinhood Markets, Inc., Robinhood Financial LLC, Robinhood Securities, LLC, Robinhood Crypto, LLC, or Robinhood Money, LLC.
©2025 Sherwood Media, LLC