Intuit (INTU) Plummets 4.2%: What's Fueling the Selloff?

Summary
• Intuit (INTU) trades at $608.75, down 4.2% from its $635.44 open
• Intraday range spans $608.25 to $637.26
• Options volume surges on 610/625 call strikes
• Sector leader Microsoft (MSFT) declines 1.93%

Intuit’s sharp intraday selloff has captured market attention as the stock trades nearly 4.2% below its open. With a 52-week high of $813.70 and a 52-week low of $532.65, the move raises questions about catalysts behind the decline. Analysts and institutional activity suggest a mix of bearish signals, including recent insider sales, downgraded ratings, and sector-wide tech stock rotation.

Bearish Catalysts: Insider Sales, Analyst Downgrades, and Sector Rotation
The selloff in Intuit shares is driven by a confluence of bearish factors. Recent insider transactions, including CEO Sasan Goodarzi’s 75% reduction in holdings and Director Scott Cook’s 0.02% stake reduction, signal internal skepticism. Analysts have also shifted sentiment: Wells Fargo downgraded the stock to Equal Weight, while Goldman Sachs initiated a Neutral rating with a $720 price target. Sector-wide rotation into AI-focused tech stocks like Microsoft and NVIDIA has further pressured Intuit, which lacks immediate AI-driven revenue visibility despite its QuickBooks and TurboTax platforms.

Application Software Sector Weakness: Microsoft Drags, Intuit Lags
The Application Software sector faces headwinds as Microsoft (MSFT), the sector leader, declines 1.93% intraday. Intuit’s 4.2% drop outpaces the sector’s broader correction, reflecting its higher valuation multiples (P/E of 43.43 vs. MSFT’s 34.5) and lack of near-term AI monetization. While Microsoft benefits from AI infrastructure demand, Intuit’s recent partnership with BDO Canada and AI-driven marketing efforts have yet to translate into tangible revenue growth for investors.

Bearish Positioning: Leveraged Calls and Short-Term Put Protection
• 200-day MA: $683.55 (well above current price)
• RSI: 31.14 (oversold territory)
• MACD: -4.53 (bearish divergence)
• Bollinger Bands: Price near lower band at $629.70

Technical indicators suggest a continuation of the bearish trend. Key support levels to watch include the 30-day support at $633.23 and the 200-day MA at $683.55. For leveraged exposure, consider the INTU20260123C610 call option (strike $610, 1/23 expiration) with 60.61% leverage and 27.45% implied volatility. For downside protection, the INTU20260123P602.5 put option (strike $602.5, 1/23 expiration) offers 89.13% leverage and 10.41% IV.

Top Options Contracts:
• INTU20260123C610 (Call):
- Strike: $610 | Expiry: 2026-01-23 | IV: 27.45% | Leverage: 60.61% | Delta: 0.4647 | Theta: -1.376 | Gamma: 0.0138 | Turnover: 16,700
- High leverage and moderate delta position this call to benefit from a rebound above $610. A 5% downside scenario (to $578.31) yields a $31.69 payoff.
• INTU20260123C625 (Call):
- Strike: $625 | Expiry: 2026-01-23 | IV: 29.06% | Leverage: 113.50% | Delta: 0.2869 | Theta: -1.004 | Gamma: 0.0111 | Turnover: 305,594
- High leverage and liquidity make this contract ideal for aggressive bulls. A 5% downside scenario (to $578.31) yields a $46.69 payoff.

Aggressive bulls may consider INTU20260123C610 into a bounce above $610, while cautious bears should monitor the $602.5 support level for put option entry.

Backtest Intuit Stock Performance
The backtest of Intuit (INTU) after a -4% intraday plunge from 2022 to the present reveals a poor short-term performance. The 3-day win rate is 0.00%, the 10-day win rate is 14.29%, and the 30-day win rate is 0.00%, indicating that the stock tends to underperform in the immediate aftermath of such events. The maximum return during the backtest period was -2.55%, which occurred on the first day after the event, suggesting that the stock often fails to recover losses even over the short term.

Act Now: Position for a Volatile Finish
Intuit’s sharp intraday decline reflects a mix of bearish fundamentals and sector rotation. With key support levels at $602.5 and $633.23, traders should prioritize short-term options with high leverage and liquidity. The INTU20260123C610 call offers a compelling risk-reward profile for those anticipating a rebound, while the INTU20260123P602.5 put provides downside protection. Watch Microsoft’s performance as a sector barometer—its 1.93% decline could signal broader tech weakness. Position now to capitalize on the volatility ahead.