Hot or Not, Stock Market Edition: 02/27/2025

What’s smoking and what’s smoldering? Here’s what we’re watching RN: 

• HOT: Udemy (NASDAQ: UDMY) emerges as an AI winner; Eli Lilly and Company (NYSE: LLY) cuts costs and gains investor support.
• NOT: Krispy Kreme (NASDAQ: DNUT) issues weak guidance; Trump Media & Technology Group (NASDAQ: DJT) closes in the red several days in a row.

Here’s the story – and for more big market movers, check the biggest winners and biggest losers on WSZ. 

🔥 HOT: Udemy (NASDAQ: UDMY) gained 2.2% on Tuesday as it continues to impress investors with its strong growth and resilience in the age of AI. Last week, the company reported profit numbers 50% higher than the analysts predicted, leading to a sizable gain and several rating upgrades. This week, the stock has consolidated at a level 26.6% higher than its pre-earnings close, indicating that the market believes that the new price is justified. Udemy’s secret sauce appears to be leveraging AI where it makes sense but highlighting that hallucinations and incorrect information still make human experts an important part of edtech. We give UDMY an A Zen Rating and a Strong Buy recommendation, given that it appears poised to dominate its sector in 2025.

🥶 NOT: Shares of Krispy Kreme (NASDAQ: DNUT) plummeted by 21.9% to a new all-time low on Tuesday after the company issued weaker-than-expected guidance for 2025. The company’s fourth-quarter numbers from 2024 weren’t great either, with a loss per share of $0.13 and a revenue of $10 million below consensus estimates. The loss is especially concerning considering that the company swung a profit of $0.02 per share one year ago. DNUT is now down 46.4% year-over-year, and we don’t see any reason why its plunge won’t continue. We give DNUT a D Zen Rating and a Sell recommendation.

🔥 HOT: Eli Lilly and Company (NYSE: LLY) gained 2.3% on Tuesday after it announced that it was cutting the price for its diabetes and obesity drug, Zepbound, for patients who have to pay for the drug out-of-pocket. LLY is up 16.9% over the last year, largely due to the success of Zepbound in treating obesity. We like LLY, but our enthusiasm is tempered by uncertainty about its ability to continue to go toe-to-toe with Novo Nordisk (Ozempic). Nonetheless, we give LLY a B Zen Rating and a Buy recommendation.

🥶 NOT: Shares of President Trump’s media company, Trump Media & Technology Group (NASDAQ: DJT), lost 7.5% on Tuesday, making it seven straight days that DJT has closed in the red. The stock has lost 21.4% over the last seven trading sessions as investors grow concerned about inflation’s effect on the U.S. population. DJT tends to swing with the news and follows sentiment about President Trump, so its volatility is higher than the volatility of similar stocks. Due to its high volatility and unpredictability, we give DJT a F Zen Rating and a Strong Sell recommendation. (Looking for safer stocks? Try our new Safe & Stable Stocks screener.)

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