Large-cap stocks have the power to shape entire industries thanks to their size and widespread influence.
With such vast footprints, however, finding new areas for growth is much harder than for smaller, more agile players.
Investors are watching small caps heat up on an otherwise slow Tuesday morning, with the Russell 2000 climbing 1% and outpacing its larger peers, amid growing bets on a Fed rate cut next month.
Aerospace and defense company HEICO (NSYE:HEI) announced better-than-expected revenue in Q2 CY2025, with sales up 15.7% year on year to $1.15 billion. Its GAAP profit of $1.26 per share was 10.3% above analysts’ consensus estimates.
US stock futures are down marginally on Sunday evening following Fed Chair Jerome Powell's dovish comments on Friday, during the Federal Reserve's annual Jackson Hole symposium, where he hinted at a potential rate cut in September.
Wall Street’s bearish price targets for the stocks in this article signal serious concerns.
Such forecasts are uncommon in an industry where maintaining cordial corporate relationships often trumps delivering the hard truth.
Expensive stocks typically earn their valuations through superior growth rates that other companies simply can’t match.
The flip side though is that these lofty expectations make them particularly susceptible to drawdowns when market sentiment shifts.
Growth boosts valuation multiples, but it doesn’t always last forever.
Companies that cannot maintain it are often penalized with large declines in market value, a lesson ingrained in investors who lost money in tech stocks during 2022.
