REVIEW: How did Walmart, Home Depot, Alibaba perform post-earnings (Aug 17-21)?
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This week (Aug 17th - 21st) was instead dominated by BTC, Gold, and Unitree skyrocketing!
Home Depot still respected (got within 0.1%) our upside target set since August 17th
Walmart smashed past downside target on slowing sales growth
Alibaba respected both upside and downside targets; got within 0.7% of 132.95 upside target set on Aug 17th
This week was dominated by big moves for the likes of Bitcoin, Gold, even Unitree.
Here's a recap of our Market Pulse report:
published Fri, Aug 21st: Bitcoin and Gold each hit 3-month highs!
published Thur, Aug 20th: Bitcoin hits 2-month high above $72k
published Tue, Aug 18th: Unitree soared "triple digits" (+461.6%) on China IPO - as expected!
Even so, the US earnings season still ran along for 3 of our highlighted stocks to watch this week.
Here's a quick recap of how they fared:
1) Home Depot respected our upside target
Home Depot unveiled its Q2 FY2027 results before US markets opened on Tuesday, Aug 18th.
By Wednesday, August 19th:
the stock rose sharply to peak at $350.16 for the week
then respected our upside price target ("respected" = markets didn't push prices beyond our target)
before falling back down.
In other words ...
Those hoping that Home Depot would rise post-earnings would have made a prudent move if take-profit levels had been set around $350.63 - about as good as it got for the stock this week.
For technical traders ...
Home Depot's price action this week once again illustrates how traders often use simple moving averages as key support and resistance levels:
Aug 18th: 100-day SMA support and 50-day SMA resistance
Aug 19th: 200-day SMA resistance
Aug 20th: 100-day SMA support and 50-day SMA resistance
Why did Home Depot initially rise towards the upside target post-earnings this week?
The world's largest home improvement retailer delivered higher-than-expected revenue ($47.9B, +5.7% YoY) and earnings per share (EPS: $4.92 vs. $4.74 est.), helped by a one-time tariff refund.
Home Depot's latest quarterly results suggest that spending on home improvement is holding up, despite interest rates and housing prices remaining elevated.
UPDATE: Post-earnings, Wall Street analysts mostly reiterated their "Buy" recommendations for Home Depot (23 buys, 16 holds, 2 sells) with another 11.9% upside expected over the next 12 months.
2) Walmart smashed past downside target!
Walmart, the world's largest retailer, unveiled its Q2 FY2027 results before US markets opened on Thursday, Aug 20th.
Then, when US markets opened that day (Thur, Aug 20th), Walmart shares tumbled as much as 10% intraday - its biggest intraday drop since 2022!
For technical traders ...
Notice in the chart above how this stock had tested its 50-day SMA for critical support in the days leading up to the earnings announcement.
Why did Walmart stocks sink this week?
Despite guiding markets to expect higher sales and (adjusted) operating income this year ...
Markets fixated on Walmart's lower-than-expected sales last quarter.
The 2.6% growth rate in Q2 for sales at US stores (open for at least a year) was its slowest in over 6 years.
Markets duly punished the stock which sent its prices well below the $110.15 downside target set since Monday, August 17th.
UPDATE: Post-earnings, Wall Street analysts stuck with their recommendations for Walmart (45 buys, 5 holds, 1 sell - same as the start of this week).
However:
The average 12 month target price has been lowered from $140 (as of Aug 17th) now down to $130.51.
The stock's big drop yesterday (Thur, Aug 20th) - as mentioned above - does however leave greater potential upside: 25.7% expected over next 12 months, higher than 21.5% as of Monday's report
3) Alibaba respected both upside and downside targets
Alibaba, China's e-commerce and cloud giant, unveiled its Q1 FY2027 results before US markets opened on Thursday, Aug 20th.
Post-earnings: Alibaba initially fell towards the downside target ...
Friday, Aug 21st: rebounded to within 0.7% of the upside target we'd set since Monday, August 17th
At time of writing: In topsy-turvy fashion, the stock has since fallen back lower to test support around its 21-day simple moving average (SMA)
In other words ...
Those hoping that Alibaba would rise post-earnings would have made a prudent move if take-profit levels had been set around $133 - about as good as it got for the stock this week.
For technical traders ...
Notice in the chart above how this stock had tested its 21-day SMA for critical support in the days leading up to the earnings announcement, and is still testing that same technical indicator for support at the time of writing.
Why did Alibaba initially fell towards the downside target post-earnings this week?
Markets are once again wary of AI overspending.
In Alibaba's case, Q2 figures showed the following costs of pursuing its AI ambitions:
75% profit plunge down to US$1.6 billion
nearly US$ 10 billion in capex spending
US$ 6.6 billion in free cash outflow
The above-listed figures offset the 9% revenue growth, and the stellar numbers from its AI cloud business: +45% revenue growth, triple-digit AI product growth for 12 straight quarters.
READ MORE (published last Friday, Aug 14th): Markets also punished Tencent - Alibaba's AI competitor.
UPDATE: Wall Street experts predict that Alibaba could rise another 40.7% over the next 12 months, having slightly raised their average target price from $182.80 pre-earnings, now up to $183.65 post-earnings.
DISCLAIMER: This article is provided for general information purposes only and reflects publicly available data and research at the time of writing. It does not constitute investment advice, nor an offer or solicitation to buy or sell any financial instruments or digital assets. Past performance is not indicative of future results. Your ability to access or use any products or services mentioned may be subject to the laws and regulatory requirements of your jurisdiction.