Palo Alto Networks beats earnings estimates despite margin dip

In the United States on May 21, 2025, multiple companies made headlines during premarket trading, influencing the stock market considerably. Notably, Palo Alto Networks, a leader in cybersecurity, saw its shares decline by 3.7% following disappointing gross margin figures for the fiscal third quarter, though it managed to exceed expectations regarding earnings and revenue. Meanwhile, UnitedHealth, a major health insurance provider, experienced a drop of more than 6% after HSBC downgraded its stock, citing high valuations despite a recent downturn. This prompted concerns among investors about the sustainability of the health insurance market amid changing economic conditions. Target, a well-known retailer, faced a decline of 3.5% as it reported missed first-quarter revenue estimates. Executives attributed this underperformance to factors such as tariff uncertainty, reduced discretionary spending by consumers, and backlash over the company's scaling back diversity, equity, and inclusion initiatives. These factors have raised concerns about Target's future sales performance. In contrast, Lowe's, another major player in retail focused on home improvement, experienced a surge of 2% after reaffirming its full-year forecast, which instilled confidence in investors. The company reported better-than-expected earnings per share, although revenue fell slightly short of estimates. Additionally, the homebuilder Toll Brothers saw its shares rise by over 4% after it announced fiscal second-quarter results that surpassed market expectations, signaling strong performance in the real estate sector despite broader concerns in the economy. However, not all companies fared well. Carter's, a children's clothing company, saw its shares fall by approximately 6% after announcing a reduction in its quarterly dividend amid persistent market challenges. Furthermore, semiconductor supplier Wolfspeed plunged more than 60% as reports indicated that it could be preparing to file for bankruptcy soon, highlighting the volatile state of the technology and supply chain sectors. Finally, Xpeng, a Chinese electric vehicle manufacturer, reported a smaller-than-expected loss for the first quarter, prompting a premarket rise of more than 5% in its stock. The company projected a significant increase in vehicle deliveries for the upcoming quarter, showcasing a potential recovery trend in the EV market. These mixed results reflect ongoing challenges and opportunities within various sectors of the economy, emphasizing the complexity of current market dynamics.