Happy Tuesday. Here’s what’s on the up and what’s headed down, according to our Zen Ratings system:
P.S. For more stocks making moves, check out our Zen Ratings Upgrades & Downgrades screener.
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🥶 NOT: Once upon a time, SoundHound AI (SOUN) was the “$3 AI wonder stock” — but more recently, it looks like a cautionary tale of hype meeting reality. While some articles tout SoundHound's AI growth potential and analyst price targets, the market is clearly unconvinced — the stock is down 40% in the past month. On top of that, the stock was just downgraded to a Zen Rating of F (Strong Sell), and currently ranks in the bottom 5% of the 4600+ stocks we track (yeah — pretty bad). Looking at the Component Grades, the Sentiment rating is also an F, Safety is D, Financials is D, and Value is D. Once you move past the AI hype, this appears to be a company in crisis — our quant ratings system strongly suggests you sell if you’re holding, or avoid if you’re not.
🔥 HOT: Pet healthcare spending is booming, and Elanco Animal Health (ELAN) is positioned to capitalize on this secular tailwind. The stock has been steadily climbing over recent weeks and months, culminating in a total 50% gain YTD. Happily, Elanco's fundamentals back up the momentum. The company earns Zen Rating of A (97.6th percentile of stocks we track), with particularly strong Growth and Value ratings of A and B respectively. The stock's Momentum rating of B reflects its recent surge, paired with a similarly solid B for Safety. (Find more safe stocks here.) With a top-tier Zen Rating and the ongoing trend of rising pet healthcare spending, Elanco looks poised for continued appreciation.
🥶 NOT: Despite operating in the hot AI infrastructure space, CoreWeave’s (CRWV) Q3 results disappointed. The stock has crashed 40% in the past month, and the damage keeps mounting. The stock carries a Zen Rating of F, with nearly every metric flashing red. The company's Safety rating is a concerning D, with additional Ds for Financials and Value. This isn't a temporary pullback; it's a fundamental deterioration in investor confidence. While some bulls argue the AI infrastructure story remains intact, the market is clearly worried about CoreWeave's ability to deliver on its promises. The company faces supply chain headwinds and profitability challenges that overshadow the sector's growth narrative. Even if the AI infrastructure thesis is correct long-term, the company's near-term execution risks and margin pressures make this a stock to avoid until the situation stabilizes.
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