Week in review: Cloudflare outlook, Apple costs, and Airbnb bookings

Cloudflare claws back ground as results top estimates and guidance rises

Breadth. 48.2% of the 991 most heavily traded U.S.-listed stocks rose this week.

The S&P 500, day by day

• Mon −0.51%
• Tue +0.36%
• Wed · Best day +1.58%
• Thu · Worst day −4.36%
• Fri +0.31%

Sectors this week

• Communication services +4.89%
• Real estate +1.92%
• Consumer discretionary +1.91%
• Industrials −2.83%
• Technology −8.23%
• Energy −12.00%

Biggest gains

• Applovin APP +71.21% (+$49.54B in market value). AppLovin beat third-quarter estimates, and analysts raised price targets, citing the rollout of its hybrid AI model.

• Unity Software U +36.58%. Unity beat third-quarter estimates, turned a profit under standard accounting rules and raised its sales guidance.

Biggest declines

• Lumentum Holdings LITE −35.94% (−$27.37B in market value). Lumentum fell as Marvell agreed to an all-stock takeover and AI stocks sold off after the midterm vote.

• Seagate Technology Holdings STX −28.48% (−$42.15B in market value). Storage and memory makers fell after the midterm results raised fears of data-center delays and weaker demand.

• Index funds hold Nvidia in proportion to its size, and Nvidia lost $430 billion in market value this week, the largest change among large U.S.-listed companies. The stock tumbled 8.8%, or $8,800 on $100,000 held in the shares alone. On $100,000 in an S&P 500 fund, the week cost $2,680, and the index has slid 2.7% this month so far. The question is whether a single stock's slide may keep steering a fund built from many companies.

• Bond funds gained value this week because bond prices move opposite to yields, and the 10-year Treasury yield fell 8 basis points to 4.86%. That yield is what the U.S. government pays to borrow for a decade, and lenders use it as a guide for mortgage rates. The question is whether yields keep easing from here: a further drop could lift bond prices again, while a rebound could reverse this week's gain.

• Sector funds ran far apart this week. The communication services fund surged 4.9% to lead every sector, adding $4,890 on $100,000 held. At the other end, the energy fund tumbled 12.0%, and $100,000 in it lost $12,000. The question is whether energy's slide deepens or reverses; a sector fund carries that swing in full, while a broad fund spreads it across many industries.

1. 1

   Mon · AAPL · −1.83% Apple's quarterly beat fails to lift the stock for the week. Apple reported fiscal fourth-quarter revenue and earnings per share above analyst estimates after Monday's close, yet its shares fell in after-hours trading. The stock surged 5.3% on Wednesday, then lost ground on Thursday and Friday. By Friday's close it was down 0.7% for the week. The question is whether sales growth holds up from here; Apple's next quarterly report may show it.

2. 2

   Tue · AAPL · −1.90% Apple warns memory costs may squeeze margins past the holidays. On Tuesday, Apple said memory prices will keep rising past the holidays, squeezing its own margins. Its shares slid 1.9% that day, and the company lost $26 billion in market value. Memory makers Micron, Sandisk, Seagate and Western Digital rallied on the same news. For your index fund, the question is whether higher memory costs dent Apple's margins; its next earnings report may show how much.

3. 3

   Thu · ABNB · −3.54% Airbnb shares climb as bookings growth beats forecasts. Airbnb beat third-quarter earnings and revenue estimates after Thursday's close, and gross bookings and nights booked both grew from a year earlier, the company reported. The shares surged 11.7% on Friday and ended the week up 15.6%, closing at $189.99. The question is whether bookings keep growing through the holiday season; Airbnb's next quarterly report may show it.

4. 4

   Thu · SO · +0.24% Southern Company lifts outlook, but its shares slip for the week. Southern Company said Thursday that its third-quarter results beat estimates and that it raised its full-year profit outlook. The utility pointed to rising electricity demand from large commercial and industrial customers. The shares edged up 0.2% that day but ended the week down 1.5%, closing Friday at $92.34. The question is whether that demand from big customers keeps growing; the company's next quarterly report may show it.

5. 5

   Thu · RL · −7.35% Ralph Lauren loses ground as European shoppers pull back. Ralph Lauren said Thursday that its second-quarter results beat estimates and that it raised its full-year outlook. The company also gave softer third-quarter revenue guidance and warned that European shoppers are pulling back. The shares tumbled 7.3% that day and ended the week down 4.2%, closing Friday at $376.56. The question is whether European spending steadies; the company's holiday-quarter report may show it.

• Topics: Energy

  Dominion Energy beats estimates as data-center power demand keeps climbing

  Dominion Energy said its third-quarter results beat estimates and that demand from data centers kept rising, with its contracted data-center capacity climbing again. For a utility fund or the utilities slice of your index fund, AI power demand may keep supporting earnings even when chip stocks fall.

• Topics: Big Tech, Chips

  OpenAI finance chief says data-center spending continues despite voter backlash

  OpenAI finance chief Sarah Friar said on Friday that the company will keep spending on AI data centers despite midterm voter opposition to new developments. That plan may keep supporting orders for the chipmakers and cloud firms that dominate many tech funds.

• Topics: Startups, Chips

  Blackstone warns Anthropic could get a junk credit rating after listing

  Anthropic could carry a junk rating, meaning below investment grade, if it goes public, Blackstone told investors, warning this could raise its borrowing costs as it pays for chips. Pricier debt for a large chip buyer might matter for the chipmakers that sell to it.

Why a company's forecast can move its stock more than its results. Guidance is a company's own estimate of the sales and profit it may report in the coming months, usually issued with its quarterly results. On Thursday, Cloudflare beat third-quarter revenue and earnings estimates and raised its outlook, and the stock rallied after hours. Prices often react more to guidance because it describes the period ahead, while the finished quarter is history. A raised or cut forecast could move a stock you hold more than the results themselves.

Guidance in the glossary

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The big picture. The week's losses sat in a few heavy corners, led by the energy and technology slides above. Elsewhere the picture was mixed: industrials slid 2.8%, while real estate jumped 1.9% and consumer discretionary 1.9%. Only 48.2% of stocks rose for the week, nearly an even split. Thursday's selling did most of the damage; the Dow tumbled 3.4% that day. Even after this month's slide, the S&P 500 is up 7.8% for the year. Long-term borrowing costs eased this week, yet the 10-year Treasury yield is still up 68 basis points since January.

Question of the week. This week's stories carried no figures from Friday's October jobs report, so the answer stays open. For fund holders, Friday's move came from company results instead, with Cloudflare's rebound helping lift technology funds.

Tomorrow: The Week Ahead, on October consumer and producer prices and the weekly jobless claims report.