Volatility cuts both ways - while it creates opportunities, it also increases risk, making sharp declines just as likely as big gains.
This unpredictability can shake out even the most experienced investors.
A number of stocks fell in the afternoon session after stocks gave back some of the gains from the previous day as the White House clarified the tariffs on imports from China would add up to 145%, while the baseline 10% tariffs remained in place for some countries. This reminded markets that the global trade environment remained volatile, limiting the potential for sustained gains.
As the Q4 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the vertical software industry, including Upstart (NASDAQ:UPST) and its peers.
The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how vertical software stocks fared in Q4, starting with Toast (NYSE:TOST).
Even during a down period for the markets, Toast has gone against the grain, climbing to $34.64. Its shares have yielded a 24.2% return over the last six months, beating the S&P 500 by 27.5%. This was partly due to its solid quarterly results, and the run-up might have investors contemplating their next move.
Shares of restaurant software platform Toast (NYSE:TOST)
fell 7% in the morning session as markets remained anxious about the negative impact of tariffs, with concerns intensifying following new updates from the Trump administration. Treasury Secretary Scott Bessent noted on CNBC, "We're focused on the real economy.... I'm not concerned about a little bit of volatility over three weeks."
Adding to the concerns, President Trump announced on Truth Social that his administration was considering imposing a 200% tariff on all alcoholic beverages imported from European Union countries. This move was in response to the EU's 50% tariff on whisky. Trump added, "This will be great for the Wine and Champagne businesses in the U.S."
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.
