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What history tells us about bull markets after the 3-year mark 👇🏻<video src="https://www.youtube.com/embed/gar4srTLRj4" poster="https://cdn.ainvest.com/articles/focusnews/coverimage/content/pictures/kevin Mahn_1ad0ea3c1766091160211.jpg" data="{&quot;videoUrl&quot;:&quot;https://www.youtube.com/embed/gar4srTLRj4&quot;,&quot;coverUrl&quot;:&quot;https://cdn.ainvest.com/articles/focusnews/coverimage/content/pictures/kevin Mahn_1ad0ea3c1766091160211.jpg&quot;}"></video>U.S. equities closed higher Thursday, December 18, extending a late-year rally as investors balanced cooling inflation data against signs the Federal Reserve remains wary of cutting interest rates too quickly.The Dow Jones Industrial Average rose 65.88 points, or 0.14%, to 47,951.9. The S&amp;P 500 added 53.33 points, or 0.79%, to 6,774.76, while the Nasdaq Composite climbed 313.04 points, or 1.38%, to 23,006.4. The Russell 2000 gained 0.59% to 248.69, reflecting modest strength in smaller-cap stocks.Markets were supported by new inflation data showing price pressures continuing to ease. The Consumer Price Index for November increased 0.2% over the two-month period from September and was up 2.7% from a year earlier, the U.S. Bureau of Labor Statistics said. Core inflation, which excludes food and energy, rose 2.6% year over year, indicating a gradual slowdown in underlying price growth cpi. Energy prices remained a notable source of pressure, rising 4.2% over the past 12 months, while shelter costs increased 3.0%.However, expectations for imminent rate cuts were tempered by a brighter economic outlook from the Federal Reserve. The central bank recently raised its median forecast for 2026 U.S. gross domestic product growth to 2.3%, up from 1.8% in September and 1.6% in June. That upgrade reflects economic activity rebounding after the federal government shutdown and stronger productivity as companies adopt artificial intelligence, <a href="https://www.horizoninvestments.com/a-brighter-outlook-for-2026/" target='__blank'>according to Horizon.</a> Additional support is expected from tax and capital-spending provisions in the One Big Beautiful Bill Act, which Horizon said could boost consumer spending and corporate investment New Article Build - Google Docs.Horizon said stronger nominal and real growth would likely benefit cyclical sectors, whose earnings are more sensitive to economic activity. At the same time, firmer growth combined with inflation still above the Fed’s target could reduce the likelihood of further interest-rate cuts next year, even under a new Fed chair.Other markets sent mixed signals. Crude oil futures edged up 0.14% to $55.89 a barrel, while gold futures slipped 0.27% to $4,362.30 an ounce. Bitcoin fell 1.24% to $84,894.05, lagging traditional risk assets. The Cboe Volatility Index dropped sharply, down 6.19% to 16.53, suggesting easing investor anxiety.Overall, Thursday’s session reflected cautious optimism. With inflation moderating and growth expectations improving, investors appear increasingly focused on whether the coming year brings broader earnings growth rather than a rapid shift toward easier monetary policy.

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Stocks Rise at Year-End as Inflation Data Temper Rate-Cut Expectations

ServiceNow's aggressive AI expansion is a high-stakes bet on becoming the central nervous system of enterprise automation. The core investment question is whether this pivot from workflow orchestration to an AI agent control tower creates a durable competitive moat or becomes a costly distraction. The answer hinges on three key financial metrics that will determine execution success.First, the top-line growth remains robust. The company delivered <a href="https://newsroom.servicenow.com/press-releases/details/2025/ServiceNow-Reports-Fourth-Quarter-and-Full-Year-2024-Financial-Results-01-29-2025-traffic/default.aspx">subscription revenues of $2,866 million in Q4 2024, representing 21% year‑over‑year growth</a>. This consistent acceleration, alongside a cRPO of $10.27 billion that grew 19% year-over-year, signals strong underlying demand and a healthy sales pipeline. These are the financial foundations that fund a risky strategic shift. The real test, however, is in the new AI product line.The second metric is the explosive adoption of its AI service desk solution. Management highlighted that <a href="https://newsroom.servicenow.com/press-releases/details/2025/ServiceNow-Reports-Fourth-Quarter-and-Full-Year-2024-Financial-Results-01-29-2025-traffic/default.aspx">the number of Now Assist service desk deals grew over 150% quarter‑over‑quarter</a>. This isn't just incremental growth; it's a hockey-stick ramp-up that suggests the AI platform is resonating powerfully with customers. It validates the core premise that enterprises are moving beyond simple automation to seek intelligent, agent-driven transformation.The third metric is the scale and scope of the new platform itself. The upcoming Yokohama release represents the pivot in action. It introduces <a href="https://newsroom.servicenow.com/press-releases/details/2025/ServiceNows-latest-platform-release-adds-to-thousands-of-AI-agents-across-CRM-HR-IT-and-more-for-faster-smarter-workflows-and-maximum-business-impact-03-12-2025-traffic/default.aspx"><img src="https://cdn.ainvest.com/aigc/hxcmp/images/compress-qwen_generated_1766099475957.jpg.png" style="max-width:100%;"/>teams of preconfigured AI agents</a> for every major business function, from IT to HR to CRM. More critically, it adds an AI Agent Orchestrator to harmonize these agents. This isn't about adding more workflow steps; it's about creating a centralized control tower for an entire fleet of AI agents. The goal is to provide the predictable outcomes from day one that enterprises demand as they scale AI deployment. The risk is execution: can it maintain its 21% growth while successfully transitioning its entire product suite and customer base to this new AI-centric model? The next earnings reports will answer that question.<visualization data='{"components":[{"show_type":"jgyNewLowcode","config":{"type":"iwcapp/stockBackTestTool","version":"0.0.3","url":"//cdn.ainvest.com/frontResources/s/foiegras/stockBackTestTool/0.0.3/stockBackTestTool@0.0.3index.js"},"data":{"columns":[{"index_name":"strategy_basic_info","key":"strategy_basic_info","type":"Object"},{"index_name":"backtest_condition","key":"backtest_condition","type":"Object"},{"index_name":"backtest_result","key":"backtest_result","type":"STR"}],"datas":[{"strategy_basic_info":{"name":"NOW Earnings Beat Drift Strategy","description":"Long-only strategy: Enter after earnings with +5% open gap and ≥21% YoY revenue acceleration. Exit on 10-day low break, 15-day max hold, +8% TP, or −4% SL."},"backtest_condition":{"object":{"display_name":"Object","type":"ticker","ticker":["NOW"]},"open_signal":{"display_name":"Open Signal","type":"criteria","criteria":"Post-earnings open gap ≥5% and YoY revenue acceleration ≥21%"},"sell_signal":{"display_name":"Close Signal","type":"criteria","criteria":"Price &lt; previous 10-day low, or 15 trading days, or TP +8%, or SL −4%"},"risk_control":{"display_name":"Risk Control","parameters":{"take_profit":{"display_name":"Take-Profit","value":8,"unit":"%"},"stop_loss":{"display_name":"Stop-Loss","value":4,"unit":"%"},"max_holding_days":{"display_name":"Hold Days","value":15}}}},"backtest_result":"https://cdn.ainvest.com/backtest/agent/session/784562/1800109709/6952c3bc-280e-43f1-b3f6-29b43c51de57/now_earnings_drift_backtest.json"}]},"uuid":"1766099611891"}],"page":{"layout":{"layout_mode":"grid","layout_data":"[{\"uuid\": \"1766099611891\", \"show_type\": \"jgyNewLowcode\"}]"}}}'></visualization><h2>The Mechanics of Growth: Scaling the AI Premium and Managing the Balance Sheet</h2>ServiceNow's financial engine is firing on all cylinders, driven by a powerful combination of customer consolidation and strategic capital allocation. The company's ability to command an AI premium is directly tied to its success in scaling its largest accounts. The number of customers generating more than $5 million in annual contract value (ACV) grew by <a href="https://newsroom.servicenow.com/press-releases/details/2025/ServiceNow-Reports-Fourth-Quarter-and-Full-Year-2024-Financial-Results-01-29-2025-traffic/default.aspx">21% year-over-year</a>, a figure that underscores the platform's deepening stickiness with its most valuable enterprise clients. This isn't just about adding new logos; it's about expanding the footprint within existing relationships. When a handful of massive clients drive a disproportionate share of growth, it signals a high-value, sticky business model that can support premium pricing. The company's total subscription revenue growth of 21% for the quarter is a direct outcome of this strategy, with the CEO noting that GenAI net new ACV stepped up meaningfully in the period.This growth, however, comes with a structural cost: dilution. As the company invests heavily in innovation and acquires talent to fuel its AI ambitions, the share count naturally expands. To manage this, ServiceNow's board authorized a <a href="https://newsroom.servicenow.com/press-releases/details/2025/ServiceNow-Reports-Fourth-Quarter-and-Full-Year-2024-Financial-Results-01-29-2025-traffic/default.aspx">$3 billion share repurchase program</a> with the primary objective of offsetting the impact of dilution. This is a classic financial guardrail. It signals confidence in the stock's valuation while providing a direct mechanism to support earnings per share (EPS) as the business scales. The move is pragmatic, acknowledging that growth capital is essential but that shareholder returns must be maintained to justify the AI premium investors are paying.The platform's technical architecture is the third pillar of this growth story. ServiceNow is building a formidable data connectivity advantage through its <a href="https://newsroom.servicenow.com/press-releases/details/2025/ServiceNows-latest-platform-release-adds-to-thousands-of-AI-agents-across-CRM-HR-IT-and-more-for-faster-smarter-workflows-and-maximum-business-impact-03-12-2025-traffic/default.aspx">Workflow Data Fabric</a> and Common Service Data Model (CSDM). These are not mere features but foundational elements that solve a critical enterprise problem: data fragmentation. By breaking down barriers between disparate systems, the platform enables AI agents to operate with a connected, enterprise-wide view. This is a key differentiator in the agentic AI race, where the ability to orchestrate workflows across CRM, HR, IT, and finance is paramount. As the company's leadership states, this setup enables seamless data connectivity with Workflow Data Fabric, turning insights into action and creating a "single view of all workflows." This technical moat supports the AI premium by making the platform indispensable for complex, cross-functional automation.The bottom line is a self-reinforcing cycle. Premium pricing is validated by the growth of its largest customers. That revenue funds the innovation and capital returns that keep investors satisfied. And the underlying data fabric ensures the platform's value proposition only strengthens as more workflows are automated. The risks are executional-can this pace of ACV growth be sustained?-but the mechanics are clear: ServiceNow is scaling its AI premium through customer consolidation, managing its balance sheet with disciplined capital returns, and building a technical advantage that is difficult to replicate.<h2>Valuation and the Market's Skepticism: Pricing the AI Future</h2>The market's verdict on this AI platform is brutally clear. The stock has plunged over 85% over the past 120 days, trading near its 52-week low of $151.15. This isn't a minor correction; it's a collapse that has erased nearly all of the year's gains and left the company's valuation in freefall. The current price of $153.38 sits in a narrow range, with intraday volatility of 4.39% and a turnover rate of just 0.93%. This combination of deep losses, low trading activity, and high volatility paints a picture of a stock caught between extreme pessimism and a lack of conviction.This valuation is a direct discount for risk. The market is pricing in the very real possibility that the company's ambitious AI expansion fails to translate into sustainable growth. The deal's structural compromises-operating under a licensed algorithm, facing potential political interference, and navigating a hostile regulatory environment-create a high-friction path to profitability. The stock's plunge suggests investors see these execution risks as overwhelming, not as manageable hurdles.Yet, the question remains: is this a buying opportunity for the long-term AI thesis? The numbers argue against it. A rolling annual return of -86.28% indicates the company is not just struggling; it is in a deep, multi-year decline. For a growth stock, this kind of performance is a red flag, not a signal to buy. The low turnover rate suggests the market is not actively trading the stock, which often means institutional investors are waiting for clarity or have already written it off.The bottom line is that the current valuation adequately discounts the near-term risks. It reflects a market that has lost faith in the company's ability to execute its AI strategy within the new geopolitical constraints. For the long-term AI platform thesis to be validated, the stock would need to show a clear inflection point-a reversal of the -82.32% 5-day decline and a return to meaningful trading volume. Until then, the market's skepticism is the prevailing narrative.<h2>Risks and Constraints: Where the AI Platform Thesis Could Break</h2><visualization dataurl="https://cdn.ainvest.com/news/visual/visual_components/viz_z3wlmtnq.json"></visualization>The bullish narrative for AI platforms is built on a promise of transformative productivity. ServiceNow's latest release, which <a href="https://newsroom.servicenow.com/press-releases/details/2025/ServiceNows-latest-platform-release-adds-to-thousands-of-AI-agents-across-CRM-HR-IT-and-more-for-faster-smarter-workflows-and-maximum-business-impact-03-12-2025-traffic/default.aspx">unleashes new AI agents across CRM, HR, IT, and more</a>, is a textbook example of this strategy. The company is aggressively embedding AI to become the "AI agent control tower" for enterprises. Yet this very push exposes the platform to three critical risks that could derail its growth story: unsustainable R&amp;D costs, a crowded competitive battlefield, and a stock that reflects fragile market sentiment.First, the aggressive AI rollout demands massive investment that could pressure margins. To deliver on its promise of <a href="https://newsroom.servicenow.com/press-releases/details/2025/ServiceNows-latest-platform-release-adds-to-thousands-of-AI-agents-across-CRM-HR-IT-and-more-for-faster-smarter-workflows-and-maximum-business-impact-03-12-2025-traffic/default.aspx">predictable outcomes from day one</a> and manage the entire AI agent lifecycle, ServiceNow must continuously innovate and integrate. This requires significant R&amp;D spending to keep pace with competitors and evolving enterprise needs. For a company already facing a rolling annual return of -86.28%, any sustained margin compression from these investments would be a severe headwind, undermining profitability and investor confidence.Second, competitive pressure is intensifying from both pure-play AI firms and entrenched enterprise software giants. ServiceNow is positioning itself as a unified platform, but it competes with specialized AI companies that may offer deeper technical capabilities. Simultaneously, traditional enterprise software leaders are rapidly integrating their own AI tools. The risk is that ServiceNow gets caught in the middle-needing to match the AI depth of specialists while also defending its core workflow automation business against broader software suites. This dual-front competition could dilute its value proposition and pricing power.The third and most immediate risk is the stock's extreme volatility and low trading volume, which signal fragile market sentiment. The stock has plunged -85.08% over 120 days and is down -82.32% over the past five days. This isn't just a sector downturn; it's a breakdown in investor trust. The turnover rate of 0.93% and volume of 9.628 million shares indicate thin liquidity, meaning the stock can swing violently on limited news. This volatility makes the valuation a moving target, deterring long-term investors and amplifying the impact of any execution misstep.The bottom line is that the AI platform thesis is a high-wire act. ServiceNow's strategy is sound in concept, but its execution is now under a microscope. The company must navigate a costly innovation cycle, fend off powerful competitors, and rebuild investor confidence-all while its stock price and trading activity scream distress. Until it can demonstrate a clear path to profitable AI monetization, the bullish narrative remains exposed to these fundamental constraints.

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ServiceNow's AI Platform Expansion: A Strategic Reordering or a Valuation Trap?

Tesla (TSLA) closed the most recent session with a 3.45% gain, reaching $483.37. This rebound follows a sharp 4.62% decline on December 17, suggesting a potential support zone near $467.26. Candlestick patterns indicate a bullish reversal, with a long upper shadow on the December 18 candle confirming rejection of lower prices. Key resistance appears at $495.28 (December 17 high), while support levels at $466.20 and $441.67 align with recent intraday lows, creating a consolidation pattern. Candlestick Theory The price action reveals a bullish engulfing pattern at the December 17–18 juncture, with the December 18 candle’s body completely covering the prior day’s bearish candle. This suggests short-term buying pressure. Additionally, a descending wedge pattern is forming between the December 17 high ($495.28) and the November 13 low ($396.34), indicating a potential breakout to the upside. <img src="https://cdn.ainvest.com/aigc/hxcmp/images/compress-qwen_generated_1766111066933.jpg.png" style="max-width:100%;"/> The 50% Fibonacci retracement level at $430.14 has acted as a psychological floor, with recent volume surges ($46.11B on December 18) validating the move higher. Moving Average Theory The 50-day MA (approx. $435) and 200-day MA (approx. $365) show a bullish "golden cross" configuration, with short-term momentum outpacing long-term trends. The 100-day MA (~$440) currently supports the price, and the 50-day MA crossing above the 100-day MA reinforces the uptrend. However, the 200-day MA remains a critical threshold; a break above $483.37 would confirm a sustained bullish bias, while a retest of the 50-day MA could trigger consolidation. MACD &amp; KDJ Indicators The MACD histogram expanded positively on December 18, aligning with the price surge, but the signal line has yet to cross above the MACD line, suggesting momentum may be building. The KDJ (Stochastic) indicator shows %K at 85 and %D at 75, signaling overbought conditions, though divergence between price and oscillator levels has not yet emerged. This implies the uptrend may persist, but a pullback to the 20-level ($410) could precede a resumption. Bollinger Bands Volatility has expanded, with the upper band at $503.35 and the lower band at $456.35. The price currently sits near the upper band, indicating overbought territory and a probable consolidation phase. A break above the upper band would signal heightened bullish momentum, while a retest of the midline ($480) may act as a temporary support/resistance pivot. <visualization dataurl="https://cdn.ainvest.com/news/visual/visual_components/viz_oabxcl4x.json"></visualization> Volume-Price Relationship Trading volume on December 18 spiked to $46.11B, a 9.0% increase from the prior day’s $50.94B, validating the price rebound. However, volume has declined in recent sessions (e.g., $24.92B on December 11), suggesting weakening momentum. The On-Balance Volume (OBV) curve shows a positive slope but has flattened, indicating buyers may be exhausting their capacity. <visualization dataurl="https://cdn.ainvest.com/news/visual/visual_components/viz_rvn7di12.json"></visualization> A sustained volume surge above $50B would strengthen the case for a breakout. Relative Strength Index (RSI) The 14-period RSI stands at 68, nearing overbought territory (70 threshold). While this warns of potential exhaustion, Tesla’s historical volatility suggests a pullback to the 40–50 range is more likely than a reversal. A drop below 50 would signal bearish momentum, but the RSI’s alignment with the price action (no divergence) implies the uptrend remains intact for now. Fibonacci Retracement Key retracement levels at 38.2% ($460.14), 50% ($430.14), and 61.8% ($400.14) have historically influenced Tesla’s price. The current level of $483.37 aligns with the 23.6% retracement ($473.12) and upper band of the descending wedge, suggesting a test of the 38.2% level before a potential consolidation. A break above $495.28 would target the 78.6% retracement at $530.14, but this requires sustained volume and momentum confirmation. Confluence between the 50-day MA and 38.2% Fibonacci level at $460.14 suggests this area will be a critical battleground for near-term direction. While indicators like RSI and KDJ caution against overextension, the volume surge and bullish candlestick patterns imply a higher probability of continuation, albeit with increased volatility. Divergences remain absent, supporting the view that the uptrend is structurally intact.

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Tesla Shares Rebound 3.45% as Technical Indicators Signal Bullish Reversal

<video src="https://www.youtube.com/embed/KoLkSx_GABk" poster="https://cdn.ainvest.com/articles/focusnews/coverimage/content/pictures/MarronePlus Image_8c878cd81766085499028.jpeg" data="{&quot;videoUrl&quot;:&quot;https://www.youtube.com/embed/KoLkSx_GABk&quot;,&quot;coverUrl&quot;:&quot;https://cdn.ainvest.com/articles/focusnews/coverimage/content/pictures/MarronePlus Image_8c878cd81766085499028.jpeg&quot;}"></video>FedEx heads into its <a href="https://finance.yahoo.com/news/fedex-earnings-preview-expect-125130028.html" target='__blank'>fiscal second-quarter report</a> tonight with the stock trading at its strongest levels in more than a year and expectations quietly rising. Shares have climbed steadily from the low-$230s since September to roughly $286 ahead of the print, reflecting growing confidence that management’s multi-year transformation effort is finally translating into durable earnings power. This quarter now serves as an important checkpoint: not just for near-term execution, but for whether FedEx can sustain momentum into fiscal 2026 against a far more complicated global trade backdrop.At a high level, FedEx remains a global transportation and logistics heavyweight, but the investment narrative has shifted meaningfully over the past year. <a href="https://www.barrons.com/articles/fedex-earnings-stock-price-e8931a5d?gaa_at=eafs&amp;gaa_n=AWEtsqeBh3ZycLCK40RjdfcG8MqUDhSyLbM54K7p8JhvVLQ3qSX6W5GU2b477raJa5k%3D&amp;gaa_ts=69445301&amp;gaa_sig=L3j4SJCgi_Vw38dtyfku_0j0I_uF8eANViFe-HKI02zEnMCk_7VYBLH1-qa52gMkPyTrhc1Yte_LIg1omDCSlQ%3D%3D" target='__blank'>The focus</a> is no longer on cyclical volume recovery alone. Instead, investors are increasingly keyed in on structural cost reduction, network optimization, and portfolio simplification—most notably the planned spin-off of the Freight (LTL) business in June 2026. Management has framed this period as one of margin expansion and free cash flow improvement, even if revenue growth remains moderate.For the November quarter, consensus expectations call for adjusted EPS of roughly $4.10–$4.15 on revenue around $22.8 billion, representing modest year-over-year growth from last year’s $4.05 EPS and $22.0 billion in sales. That headline growth is not what matters most. Investors are far more focused on segment-level execution, particularly within U.S. domestic parcel operations, and whether Express margins can hold up amid a heavier business-to-consumer mix and continued pressure in international trade lanes.The most closely watched metric tonight will be margin performance at Federal Express (FEC). Last quarter, FedEx demonstrated it could grow adjusted operating income despite multiple headwinds, including a $150 million global trade drag and the expiration of a U.S. Postal Service contract. Management highlighted strong domestic package demand, with U.S. average daily volume up 5% year over year, and meaningful margin expansion at Ground driven by pricing discipline and cost efficiencies. The question now is whether those gains are sustainable as peak-season dynamics, heavier B2C shipments, and international softness collide in Q2.Network 2.0 remains central to the bull case. The integration of Ground and Express networks is designed to drive long-term efficiency, reduce redundant costs, and improve asset utilization across North America and Europe. Analysts broadly believe much of the “easy” savings from the DRIVE cost program have already been realized, making execution on Network 2.0 increasingly critical. This quarter should provide more clarity on whether those savings are beginning to show up consistently in margins rather than episodically.Volume trends will also be scrutinized. Analysts expect 4%–5% year-over-year growth in domestic Express and Ground volumes, supported by improved execution and new customer wins, including incremental business from Amazon. This is particularly notable given UPS’s decision to step away from certain Amazon volumes due to profitability concerns. FedEx’s ability to absorb and monetize that volume profitably is a key proof point for its revamped pricing and network strategy.Internationally, expectations are more muted. Management has already flagged a roughly $1 billion headwind in fiscal 2026 tied to trade policy changes, including the removal of the de minimis exemption and weaker China–U.S. export volumes. Analysts are not expecting a sudden improvement here; instead, they want reassurance that domestic strength and cost discipline can continue to offset these pressures. Any commentary suggesting stabilization—or worse, incremental deterioration—could meaningfully influence sentiment.Guidance commentary may ultimately overshadow the quarter itself. Management reaffirmed in Q1 its full-year fiscal 2026 outlook for 4%–6% revenue growth and adjusted EPS of $17.20–$19.00. Consensus currently sits near the midpoint of that range. Most analysts do not expect a formal raise tonight, but there is growing hope that management will signal confidence in landing toward the upper half of the EPS range, particularly if domestic trends remain firm and Network 2.0 savings accelerate.From a growth perspective, investors should focus less on consolidated revenue growth and more on operating income progression. In Q1, adjusted operating income rose 7% year over year on just 3% revenue growth—a favorable signal of operating leverage. Replicating anything close to that dynamic in Q2 would reinforce the idea that FedEx’s earnings growth is becoming less volume-dependent and more structurally driven.Capital allocation and balance sheet commentary also matter. FedEx repurchased $500 million of stock last quarter and still has $1.6 billion remaining under its authorization. With CapEx targeted at $4.5 billion for FY26—well below historical peaks—free cash flow generation remains a key pillar of the bull case, especially ahead of the Freight spin-off.Technically, the setup adds another layer of importance to tonight’s report. Shares have rallied into earnings, with $308–$313 standing out as a clear upside zone if the company delivers strong execution and confident commentary. A clean break into that range would suggest the market is willing to re-rate FedEx closer to peers on improved earnings visibility. On the downside, disappointment—particularly around Express margins or guidance tone—would likely trigger a pullback toward the $271 area, a level that now represents first key support. A decisive break below that could open the door to a deeper retracement toward the low-$240s.In sum, this FedEx report is less about whether the company can beat consensus by a few cents and more about validating a narrative that has been building all year. Investors want confirmation that domestic parcel momentum is durable, that Network 2.0 is translating into repeatable margin gains, and that management can steer through global trade headwinds without sacrificing profitability. With the stock already pricing in a fair amount of optimism, execution—and tone—will matter.

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FedEx Heads Into Earnings With Everything on the Line: Can Network 2.0 and U.S. Demand Power a Breakout Above $300?

<video src="https://www.youtube.com/embed/KoLkSx_GABk" poster="https://cdn.ainvest.com/articles/focusnews/coverimage/content/pictures/MarronePlus Image_408d24a41766087789723.jpeg" data="{&quot;videoUrl&quot;:&quot;https://www.youtube.com/embed/KoLkSx_GABk&quot;,&quot;coverUrl&quot;:&quot;https://cdn.ainvest.com/articles/focusnews/coverimage/content/pictures/MarronePlus Image_408d24a41766087789723.jpeg&quot;}"></video>Nike heads into its <a href="https://www.cnbc.com/2025/12/18/nike-nke-q2-2026-earnings.html" target='__blank'>fiscal second-quarter earnings</a> report tonight at a pivotal moment in what has been a long, grinding turnaround story. The brand remains one of the most powerful names in global sportswear, but over the past year-plus it has struggled to convert that brand equity into consistent growth, margin stability, and investor confidence. Shares have spent months battling resistance near the 200-day moving average around $67.16, repeatedly stalling as negative sentiment around China, competition, tariffs, and execution weighed on the stock. With support holding near $61, this earnings report now represents a clear technical and fundamental inflection point.The broader Nike narrative is straightforward but unforgiving. Under CEO Elliott Hill, who is now more than a year into the role, management has shifted the company back toward sport, innovation, and wholesale partnerships after years of overreliance on direct-to-consumer and lifestyle franchises. The “Win Now” and “Sport Offense” strategies are designed to simplify decision-making, speed up product cycles, and reignite brand heat in core categories like running, basketball, and football. The challenge is timing: Nike operates in a slow-turn industry, and investors are growing impatient after multiple quarters of “early signs” without a clear inflection in consolidated results.For the November quarter, consensus expectations are modest. Wall Street is looking for revenue of roughly $12.15–$12.25 billion, down about 2% year over year, with adjusted EPS around $0.37–$0.38, down more than 50% from the prior year. That decline is largely anticipated and not, by itself, the deciding factor for the stock. Instead, investors will focus on the rate of change beneath the surface and whether management can credibly argue that the worst is now behind the company.Regional performance remains front and center. North America is the key swing factor. Last quarter, the region grew 4%, with wholesale up 11%, helping offset declines in Nike Direct. Analysts are watching closely to see whether that momentum can continue, especially during the holiday period. Piper Sandler models North America up slightly year over year, versus Street expectations for a modest decline. Any upside surprise here would be interpreted as evidence that Nike’s reset with wholesale partners and improved product flow are gaining traction.China remains the largest overhang. Greater China revenue fell 10% last quarter, and consensus expectations for Q2 call for another high-single-digit to low-double-digit decline. Management has been clear that structural challenges persist, including intense local competition, uneven consumer demand, and an expensive operating model that requires better sell-through to improve profitability. Investors will be listening closely for signs of stabilization, sequential improvement at key partners like Pou Sheng, and more color on store refreshes, marketing tests, and digital strategy in the region. Even modest sequential progress would likely be viewed positively, given how low expectations have become.Competition is another pressure point. Rivals such as Hoka and On continue to gain share in performance footwear, particularly in running. Channel checks suggest strong sell-through for key models from competitors during Black Friday and Cyber Monday. That said, there are early indications that Nike’s running franchise is showing signs of life. Management previously highlighted running growth north of 20%, and several analysts note improving reception to new Nike Run launches. Investors will want confirmation that this momentum is sustainable and expanding beyond a single category.Margins are arguably the most important metric in this report. Last quarter’s gross margin of 42.2% came in better than feared, despite a 320-basis-point year-over-year decline driven by discounting, tariffs, and channel mix. For Q2, management previously guided to gross margin down 300–375 basis points, including roughly 175 basis points of headwind from incremental tariffs. Since then, tariffs have become an even larger issue, with Nike now estimating a $1.5 billion annualized cost impact, or roughly a 120-basis-point hit to fiscal 2026 gross margin.The key question is whether margin pressure is peaking. Multiple analysts point to improving promotional discipline, with fewer SKUs on sale online, reduced discounting in factory stores, and less excess Jordan and Dunk inventory flowing through clearance channels. If management suggests that markdown intensity is easing and that margin comparisons become more favorable in the back half of fiscal 2026, investors may be willing to look through near-term pain.Guidance will likely determine the stock’s reaction more than reported results. Nike has only been providing forward-quarter guidance, and most analysts do not expect formal full-year updates tonight. The market is braced for a conservative Q3 outlook, potentially calling for low-single-digit revenue declines and EPS below current Street estimates. What matters is tone: whether management frames fiscal 2026 as a year of stabilization setting up a return to growth, or as an extended reset with limited near-term visibility.From a technical perspective, the setup is clean. A convincing message around progress in North America, stabilization in China, and a path to margin recovery could finally push shares above the 200-day moving average and force investors back into the name. Failure to deliver that confidence risks another rejection at resistance, reinforcing the view that Nike’s turnaround remains more hope than execution.In sum, this earnings report is not about perfection. It is about credibility. Investors want evidence that Elliott Hill’s strategy is working, that competition is being met with better product and sharper execution, and that tariffs and China headwinds are manageable rather than structural drags. Nike does not need to declare victory—but it does need to convince the market that sunnier days are no longer just a talking point.

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