That company-specific debate is happening against a difficult market backdrop. Brent crude remains above $100, the U.S. 10-year Treasury yield is around 4.84%, and investors are waiting for Thursday’s U.S. producer price inflation report at 08:30 ET. Higher oil prices and bond yields can make investors less willing to pay high valuations for future growth.
Key stock movers to watch Thursday
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Meta (META): Investors are responding positively to its new Muse personal AI agent.
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ServiceTitan (TTAN): A roughly 30% drop shows how unforgiving the market can be when forward guidance disappoints.
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Navan (NAVN): Strong growth was overshadowed by rapidly rising expenses.
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Cloudflare (NET): AI is being viewed as a potential cybersecurity revenue opportunity rather than simply a threat.
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American Eagle (AEO): Headline earnings were helped substantially by tariff refunds.
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Signet Jewelers (SIG): Stronger operations, raised guidance and additional buybacks were rewarded.
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CooperCompanies (COO): The focus shifts from the completed quarter toward softer forward expectations.
The common thread is simple: being connected to AI or beating the latest earnings estimate is no longer enough. Investors increasingly want evidence that growth can translate into better future economics.
Meta: Can Muse help justify the enormous AI investment?
Meta shares gained more than 6% Wednesday after the company introduced Muse, a personal AI agent designed to go beyond answering questions and actually perform tasks such as booking travel, filling out forms and working across connected apps.
That matters because investors have spent much of the AI boom asking how companies investing enormous sums in AI infrastructure will eventually make money from it.
Muse gives Meta a more tangible consumer product to place against that spending.
The bullish interpretation is not simply that Meta has “more AI.” It is that the company may have another product capable of increasing engagement, strengthening its ecosystem and potentially creating subscription, commerce or advertising opportunities.
What traders could watch Thursday: whether Wednesday’s strong META move attracts further buyers or whether investors quickly take profits after the initial Muse enthusiasm.
The longer-term question remains much bigger: Can Meta convert AI spending into products people use frequently enough to produce meaningful financial returns?
ServiceTitan: Why a good quarter can still produce a 30% selloff
ServiceTitan provides almost the opposite lesson.
The company reported quarterly revenue of $292.8 million, up 21% from a year earlier, while generating more than $50 million of non-GAAP free cash flow. Those numbers were stronger than expected.
But ServiceTitan forecast third-quarter revenue of $285 million to $287 million, compared with a Wall Street estimate around $288 million. Changes involving its AI-linked Max product are also expected to temporarily delay some revenue recognition. The stock subsequently fell around 30%.
For newer investors, this can initially look irrational.
Why would a stock fall so much after beating earnings?
Because stocks trade largely on future expectations, not just the quarter that has already finished.
ServiceTitan entered the report with investors expecting rapid future growth. Even a relatively modest reduction in those expectations can cause a major valuation reset when a stock is priced for strong expansion.
What traders could watch Thursday: whether the large decline begins attracting buyers near Wednesday’s lows or whether sellers remain in control despite the much lower share price.
Navan: Growth is strong, but what does it cost?
Navan presents another variation on the same theme.
Quarterly revenue increased 35% to $232.8 million, beating expectations, while the company also raised its full-year revenue outlook to $927 million to $933 million.
Yet shares fell roughly 17% after hours.
One reason is expenses.
Operating expenses increased about 46% to $200.2 million, while the GAAP operating loss widened to $25.6 million. Management attributed some of the increase to sales commissions and AI investment.
That creates a useful question for growth-stock investors:
Is the company spending today to create much greater profits tomorrow, or is maintaining rapid growth becoming increasingly expensive?
A business can produce impressive revenue growth while still disappointing shareholders if expenses rise even faster.
What traders could watch Thursday: whether the after-hours decline survives once regular-session liquidity returns. A substantial recovery would suggest investors view the cost increase as manageable. Continued selling would indicate that profitability concerns remain more important.
Cloudflare: AI becomes part of the product
Cloudflare provides the positive counterpoint.
The company recently introduced a vulnerability discovery and remediation service that uses OpenAI Daybreak models, including GPT-5.6 Cyber, together with Cloudflare’s security and network data to identify and help remediate software vulnerabilities.
The important distinction is that investors can see a relatively direct connection between the AI technology and a commercial cybersecurity product.
My Cloudflare’s daily chart below shows the strong recovery above $300 on increased volume, with the August all-time high near $332 becoming the next major technical area to watch.
What the Cloudflare chart is showing
Cloudflare produced a strong bullish daily move, with NET closing at $314.18, up 10.5%, after reaching $317.55 intraday.
More importantly, the advance came with 4.78 million shares of volume, roughly 54% above the supplied recent volume average. That gives the move stronger confirmation than a similar rally occurring on light participation.
The advance also repairs much of the weakness from early September.
NET has pushed decisively back above the $300-$303 area, while closing relatively close to the session high. Attention can therefore shift toward the August peak around $332.22, roughly 5.7% above the latest close.
That does not mean NET must reach it.
The more useful question is whether buyers can hold the newly reclaimed area rather than immediately surrendering Wednesday’s breakout.
Cloudflare momentum is improving too
Momentum strengthened alongside price.
The supplied RSI reading increased from roughly 48.8 to 58.6 and crossed above its RSI-based moving average.
For traders, the important point is not the indicator by itself. It is that price, momentum and trading volume improved at the same time.
That combination provides stronger evidence than a rally driven by only one of those factors.
What NET traders could watch next
The $300-$303 area now becomes particularly interesting.
If NET can stay above it, the recent pullback increasingly looks repaired and the $332 area remains a logical next reference.
If the stock quickly falls back below $300, particularly with stronger selling volume, Wednesday’s breakout becomes less convincing.
Educational takeaway: Volume can help traders judge the quality of a breakout. A strong price move accompanied by unusually high trading volume suggests broader participation. It does not guarantee that the rally will continue, but it usually provides more supporting evidence than price movement alone.
American Eagle: Look underneath the earnings beat
American Eagle offers one of Thursday’s best lessons in earnings quality.
The retailer reported record quarterly revenue of $1.38 billion, while total comparable sales increased 6%. But performance differed sharply between its brands: Aerie comparable sales rose 19%, while American Eagle comparable sales fell 1%.
There is another important detail.
American Eagle received $196 million of tariff refunds, with a net benefit of approximately $161 million to operating income during the quarter.
Shares fell around 10% after hours.
This is why investors should not stop reading at “EPS beat.”
A better question is:
How much of the earnings improvement came from the underlying business, and how much came from something unlikely to repeat?
One-time gains can make a quarter look much stronger without necessarily improving the company’s long-term earning power.
Signet and CooperCompanies: Guidance remains crucial
Signet Jewelers was one of Wednesday’s strongest winners.
The company reported 2.2% same-store sales growth, raised its fiscal-year guidance and expanded its share repurchase authorization. It also said it intends to enter into a $125 million accelerated share repurchase agreement.
The combination matters: improving operations, better management expectations and capital being returned to shareholders can reinforce one another.
CooperCompanies produced a much less favorable share-price reaction.
The company reported quarterly revenue of $1.066 billion, up only 1% year over year, while its fourth-quarter guidance pointed to organic revenue growth of just 0%-2%. CooperVision is expected to show organic growth between -2% and 0% in the fourth quarter.
Again, investors are looking forward rather than backward.
What these stock moves are telling investors
The most useful lesson from this group is not that AI stocks are bullish or software stocks are bearish.
The market appears to be becoming more selective.
Investors are asking harder questions:
Meta: Can AI create products consumers actually use?
Cloudflare: Can AI become a product customers pay for?
Navan: Is AI-supported growth producing enough operating leverage?
ServiceTitan: Are future growth expectations still high enough to justify the valuation?
American Eagle: How much of reported profit comes from the underlying business?
Signet: Are better results strong enough for management to raise expectations and return more capital?
Those are very different questions, but they share one idea:
The quality of growth increasingly matters as much as the growth itself.
Four stocks at the top of Thursday’s watchlist
For Thursday’s U.S. session, META, TTAN, NAVN and NET stand out.
META tests whether enthusiasm around a tangible new AI product can continue. TTAN tests whether a 30% valuation reset is enough to attract dip buyers. NAVN tests whether investors can look beyond sharply rising costs. NET tests whether Wednesday’s high-volume breakout can hold above the reclaimed $300-$303 area.
Traders should also keep the macro environment in view. Oil above $100, elevated Treasury yields and Thursday’s PPI release could change risk appetite across growth stocks even when the individual company story remains intact.
The setups above are scenarios to monitor, not predictions of what these stocks must do next. Technical levels, earnings reactions and after-hours prices can fail or reverse quickly, particularly around major economic data. Trade or invest at your own risk and use appropriate risk controls.
What else can stock investors and traders watch today?
I’m will be tracking the market reaction to Oracle’s earnings and its $638 billion backlog to see if AI infrastructure demand can sustain current valuations.
According to Justin Low, European markets are attempting a tentative rebound ahead of the ECB decision, but with oil prices hovering above $100 and yields elevated, the recovery feels fragile.
In the U.S., I’ve observed that earnings season is taking a defensive turn with investors severely punishing misses, particularly in consumer and select tech names.
Adding to the pressure, Greg Michalowski highlighted that the major U.S. indices have dropped for three straight days amid climbing oil and Treasury yields.
Meanwhile, Adam Button recently explored unexpected twists in the AI bubble, noting rising safety concerns and regulatory pressures that could ultimately benefit traditional “HALO” stocks capable of leveraging AI for margin improvement rather than pure-play tech companies.
This article was written by Itai Levitan at investinglive.com.