Hot or Not, Stock Market Edition: 07/18/2025

• Hot: Ubiquiti (NYSE: UI) has incredible momentum despite valuation concerns; Johnson & Johnson (JNJ) beats earnings expectations 
• Not: Duolingo (DUOL) continues to plummet; Baidu (BIDU) dips amid a bigger market trend

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🔥 HOT: Shares of Ubiquiti (NYSE: UI) gained 2.6% on Wednesday, bringing its YTD return to 27.0%. While our analysis gives the stock a D rating in Value, which suggests it may be entering overbought territory, it gets stellar A ratings in Momentum, Sentiment, and Financials. Strong performance in both Momentum and Financials indicates that a stock has a strong fundamental case for adding it to your portfolio, but is also capitalizing on the positive feedback loop that characterizes momentum stocks. We feel that its momentum, combined with its strong balance sheets, warrants a Zen Rating of B and a Buy recommendation.

> Learn more about our Momentum ratings here

🥶 NOT: Less than one month before its second-quarter earnings report, Duolingo (NASDAQ: DUOL) continues to plummet. The stock has now lost 33.7% in just two months after it announced that it would be replacing part of its workforce with AI. Wednesday’s 4.5% loss was triggered by a downgrade from Morgan Stanley due to declining daily user numbers. Less than one week ago, an SEC filing revealed that the company’s CTO, Severin Hacker, sold 10,000 shares worth just under $4 million. We give the stock a D rating in Safety, but a B rating in Financials based on its most recent filings. For now, we give DUOL a C Zen Rating and a Hold recommendation, but we’ll be keeping a close eye on the company’s second-quarter earnings report on August 6th.

🔥 HOT: Wednesday held a lot of good news for Johnson & Johnson (NYSE: JNJ). The company had its second-quarter earnings, revealing an EPS of $2.77 and a quarterly revenue of $23.74 billion, 3.3% and 3.9% higher than analysts’ predictions, respectively. Johnson & Johnson also raised its full-year outlook, stating that it had previously overestimated the impact of tariffs on sales of medical devices. We feel that this spark of good news has been a long time coming for JNJ. Our analysis gives JNJ an outstanding A rating in Safety and B ratings in Sentiment, Value, and Financials, amounting to an overall Zen Rating of A and a Strong Buy recommendation. The stock closed the day up 6.2%.

🥶 NOT: Shares of Baidu (NASDAQ: BIDU), China’s primary search engine, lost 7.5% on Wednesday along with most Asian equities traded on U.S. exchanges via depository receipts. BIDU gained 8.7% on Tuesday, so Wednesday’s drop has left many investors with whiplash. The uncertainty regarding U.S.-China relations changes daily and is largely to blame for the increased volatility and trading volume on BIDU. Despite these recent fluctuations, our opinion of BIDU hasn’t changed. The stock is trading at an attractive price, which gives it a solid B rating in Value, but is otherwise unremarkable. We rank BIDU 35th out of 52 in the Internet Content & Information industry and give it a C Zen Rating and a Hold recommendation.

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