Stock Story -
What Happened: Shares of cloud communications infrastructure company Twilio (NYSE:TWLO) jumped 8.4% in the afternoon session after the company reported second-quarter earnings results. Twilio beat analysts' billings expectations this quarter. Its revenue and operating income also outperformed Wall Street's estimates. Next quarter's revenue guidance was in line, which shows that the company is roughly on track. Overall, this was a solid quarter for Twilio.
Is now the time to buy Twilio? Find out by reading the original article on StockStory, it's free.
What is the market telling us: Twilio's shares are very volatile and over the last year have had 9 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 9 days ago, when the company dropped 5.3% as major indices declined, with the Nasdaq down 3%, while the S&P 500 fell by 1.7% following weaker-than-expected earnings from Alphabet (NASDAQ:GOOGL) (YouTube Advertising revenue missed estimates) and Tesla (NASDAQ:TSLA) (7% drop in auto revenue). Tech giants, including Microsoft (NASDAQ:MSFT), Alphabet, Meta (NASDAQ:META), and Apple (NASDAQ:AAPL), have shed some of their year-to-date gains as a new market narrative—in favor of small-caps stocks—gains some momentum following the growing conviction that the Fed will start to cut rates in the second half of the year. The sentiment also benefitted from improved inflation prints, as the headline numbers edged closer to the Fed's 2% target.
Overall, the shift suggests investors are finding more reasons to hold positions in risk assets, especially small caps that tend to be more volatile.
Twilio is down 14.8% since the beginning of the year, and at $60.62 per share it is trading 22.1% below its 52-week high of $77.85 from December 2023. Investors who bought $1,000 worth of Twilio's shares 5 years ago would now be looking at an investment worth $453.51.
