Story Stocks

TripAdvisor (TRIP) is surging higher following a Wall Street Journal report that activist investor Starboard Value LP has acquired a 9% stake in the online travel company, valued at approximately $160 mln. This stake, disclosed in a regulatory filing with the SEC on July 3, positions Starboard as one of TRIP’s largest shareholders and signals potential for significant strategic and operational changes. The market’s enthusiastic response reflects investor confidence in Starboard’s track record of unlocking value at underperforming companies, particularly given TRIP’s lackluster stock performance, which has seen a 15% decline over the past 12 months (not including today's gains).

The company’s inclusion in the consumer discretionary sector, coupled with its recent exploration of strategic alternatives, including a possible sale in early 2024, further amplifies the significance of Starboard’s involvement as a catalyst for change.

• Starboard’s investment is fueling TRIP’s rally due to the hedge fund’s reputation for driving transformative changes at undervalued companies, as well as the market’s belief that the stock, trading at a market cap of approximately $2.0 bln, is significantly underpriced relative to its potential. Starboard’s SEC filing explicitly states that it views TRIP’s shares as “undervalued and an attractive investment opportunity,” and the firm intends to engage with management and the board to explore “opportunities for value creation.”
• Potential actions, based on Starboard’s history with companies like Darden Restaurants (DRI), Kenvue (KVUE), Pfizer (PFE), and Autodesk (ADSK), include pushing for operational efficiencies, cost reductions, management shake-ups, or strategic divestitures. Given TRIP’s rejection of multiple takeover offers in the past year, Starboard may advocate for revisiting a sale, restructuring the company’s capital allocation, or enhancing the monetization of its high-growth subsidiaries, Viator and TheFork, which have outperformed the core TripAdvisor platform.
• The activist’s involvement could also lead to board composition changes or a push for a new CEO to address the stock’s underperformance, which has lagged the Dow Jones U.S. Travel & Leisure Index’s 10.5% gain in 2025.
• TRIP’s stock has been weighed down by several structural and competitive challenges, most notably the slowing growth of its namesake travel review platform, which has struggled to maintain relevance in a highly competitive online travel market. The company’s share price has significantly underperformed competitors like Booking Holdings (BKNG), which gained 9% over the past three weeks, and Expedia Group (EXPE), which has benefited from stronger growth in its B2B segment.
• TRIP’s Q1 earnings, reported on May 7, 2025, showed revenue of $398 mln, up 1% yr/yr, with this modest growth driven by its Viator (experiences marketplace) and TheFork (restaurant booking) segments, which posted strong double-digit gains, while the core TripAdvisor brand saw revenue decline by 8%. The company’s EBITDA margin of 11% trails competitors like BKNG, which reported a 30% EBITDA margin in its latest quarter, highlighting TRIP’s operational inefficiencies.
• Additionally, TRIP faces intense competition from Google’s (GOOG) travel search tools, Airbnb’s (ABNB) experiences platform, and emerging AI-driven travel planning tools, which have eroded its market share. The formation of a special committee in early 2024 to explore strategic options, including a potential sale, underscores the board’s acknowledgment of these challenges, yet the rejection of takeover offers has frustrated investors, contributing to the stock’s depressed valuation.

TRIP’s stock is surging today due to Starboard Value’s 9% stake and its intent to drive value creation, signaling potential operational, strategic, or leadership changes that could unlock the company’s undervalued potential. With a proven activist track record and TRIP's underperforming stock, Starboard’s involvement is a powerful catalyst.

Synopsis (SNPS +4%) is sharply higher today following an announcement yesterday after the close that it received a letter from the Bureau of Industry and Security stating export restrictions related to China have been rescinded, effective immediately. The restrictions, initially announced on May 29, prompted this software provider to withdraw both its Q3 and FY25 guidance. The upside guidance initially reported did include management expectations of a yr/yr decline in China. With the restrictions now rescinded, investors are buying back into the stock with hopes of an improved outlook.

• Prior to the announcement, Q2 (Apr) results, released May 28, were strong, with revenues growing 10% yr/yr and EPS exceeding expectations, despite market fluctuations. AI and HPC sectors remained robust, while weakness in China was offset by strong demand from customers in other regions, particularly in Europe and South Korea.
• On June 30, SNPS provided an update on its acquisition with Ansys (ANSS), stating that it is in the advanced stages of obtaining final regulatory approval. SNPS already has merger clearance in every other jurisdiction other than China.
• The deal is expected to generate $400 mln in revenue synergies by the fourth year post-close, driven by cross-selling opportunities, with an anticipated increase in adjusted EPS in the second year.
• During the Q2 call, management had confidence that the deal would be done in 1HFY25, with the completion of the deal "the only scenario we are considering." Although that window has passed, the lifting of restrictions may be boosting investor confidence in both the outlook for its China business and the completion of the ANSS transaction.

Overall, this is a favorable development for SNPS. The earlier announcement of trade restrictions and the subsequent withdrawal of guidance triggered some selling pressure from investors. With the export restrictions now rescinded, SNPS is trading above the levels seen prior to the initial announcement, reflecting renewed investor confidence in both a recovery in its China business and the pending ANSS acquisition.

Last night, S&P Global announced that Datadog (DDOG) will replace Juniper Networks in the S&P 500 Index, effective before the opening of trading on July 9, 2025, following Hewlett Packard Enterprise’s (HPE) $14 bln acquisition of Juniper. This inclusion marks a significant milestone for DDOG, a cloud observability and security software provider that went public in 2019, as reflected by the stock's surge higher today. 

• DDOG’s addition to the S&P 500 underscores its emergence as a profitable, enterprise-scale leader in the rapidly growing cloud monitoring sector, with a market capitalization of approximately $52 bln. This move follows a trend of technology companies joining the index, with recent additions including DoorDash (DASH), Workday (WDAY), Palantir (PLTR), Dell (DELL), CrowdStrike (CRWD), and GoDaddy (GDDY), highlighting the increasing dominance of cloud-native software firms in the U.S. equity market.
• DDOG’s inclusion not only validates its financial stability and market relevance but also positions it as a secular leader in a $10 bln+ cloud observability market, driven by enterprise demand for hybrid and multi-cloud solutions.
• The addition to the S&P 500 is a powerful catalyst for DDOG’s stock for several reasons. First, inclusion triggers significant demand from passive index-tracking funds and ETFs, which manage trillions in assets and must purchase DDOG shares to rebalance their portfolios, often driving short-term price appreciation of 5–15% in the days following the announcement.
• Also, S&P 500 membership enhances DDOG’s visibility among large-cap and generalist investors, broadening its investor base and potentially improving liquidity.
• And, finally, the move signals a broader market shift from legacy hardware vendors like Juniper to cloud-native software companies, reinforcing DDOG’s strategic positioning in a high-growth sector.
• DDOG’s strong 1Q25 earnings report, released on May 6, further underpins its investment appeal. The company reported revenue of $761.6 mln, a 25% yir/yr increase, surpassing consensus estimates, while non-GAAP EPS also exceeded expectations, driven by robust demand for its observability and security products. DDOG’s customer base grew to approximately 30,500, with 3,770 customers generating $100,000+ in annual recurring revenue (ARR), up from 3,340 a year ago, reflecting a 12.9% increase in high-value accounts.
• This growth was fueled by accelerating enterprise cloud adoption and digital transformation initiatives, particularly among Fortune 500 companies, with half reportedly using DDOG’s SaaS platform for infrastructure monitoring, application performance, log management, and cloud security. DDOG’s guidance for 1Q26 and FY26 revenue also exceeded analyst expectations, driven by increased product adoption, strategic acquisitions like Eppo and Metaplane, and AI integrations that enhance its observability suite.

DDOG’s stock is surging today due to its S&P 500 inclusion, which drives immediate demand from passive funds and enhances its market visibility, compounded by its strong 1Q25 financial performance. With robust revenue growth, expanding enterprise adoption, and a leadership position in the secular cloud observability trend, DDOG’s growth prospects remain exceptionally bright.

Intel (INTC) is trading sharply lower following a Reuters report indicating that new CEO Lip-Bu Tan is considering significant changes to its contract manufacturing business, adding further uncertainty to the company’s already challenged turnaround plan. According to the report, Tan is exploring the possibility of abandoning external sales of the 18A manufacturing process, a cornerstone of former CEO Pat Gelsinger’s strategy to position INTC as a competitive foundry against Taiwan Semiconductor Manufacturing (TSM).

• INTC has dismissed the Reuters report as “hypothetical scenarios or market speculation,” asserting that its lead customer for 18A remains Intel itself, with plans to ramp up production of its Panther Lake laptop chips later in 2025. However, investors are unwilling to give INTC the benefit of the doubt, given the company’s prolonged struggles, including significant market share losses in data centers and PCs, painful stock declines, and persistent financial losses in its foundry business, which reported a $13.4 bln loss in 2024.
• The market’s skepticism is compounded by INTC’s history of execution challenges and a bureaucratic culture that has hindered its ability to capitalize on the AI-driven semiconductor boom, leading to a sharp sell-off as investors question the company’s strategic direction under Tan.
• Since succeeding Gelsinger in March 2025, Lip-Bu Tan has moved swiftly to address INTC’s financial and operational inefficiencies through aggressive cost-cutting measures. Notable actions include laying off 15,000 employees in August 2024, with further reductions targeting middle management to streamline operations, and divesting non-core assets such as part of its Altera stake. Up until the Reuters report, Tan had publicly supported Gelsinger’s 18A strategy, emphasizing its role in upcoming products like Panther Lake and Clearwater Forest, while advocating for a more measured pace of foundry expansion to preserve cash. This cautious approach was evident in INTC’s decision to delay fabrication plant completions in Ohio and Germany, reflecting Tan’s focus on aligning capital expenditures with market demand.
• INTC has two significant chip releases planned using the 18A process: Panther Lake, a next-generation laptop chip with AI capabilities set for launch in 2H25, and Clearwater Forest, a server CPU slated for 1H26. A move away from marketing 18A to external foundry customers could disrupt these launches by limiting economies of scale and reducing the process’s strategic importance, potentially forcing INTC to reallocate resources to redesign chips for alternative nodes like 14A.
• While INTC has stated it will continue using 18A for in-house chips and committed to external customers like Amazon (AMZN) and Microsoft (MSFT), abandoning broader 18A foundry sales could signal a lack of confidence in the process’s competitiveness, particularly as it reportedly lags TSM’s N2 technology.
• In response to 18A’s challenges, Tan is reportedly considering steering foundry customers toward INTC’s 14A process, a next-generation node expected to offer advantages over TSM’s comparable technologies, potentially positioning INTC to better compete for major clients like Apple (AAPL) and Nvidia (NVDA). The 14A process promises a 15-20% performance-per-watt improvement over 18A, with a design tailored to meet external customer needs from the ground up, unlike 18A, which was initially developed for INTC’s internal use.

The Reuters report introduces significant uncertainty and doubt surrounding INTC’s turnaround efforts and the viability of its 18A process, which was intended to be a linchpin in reestablishing the company as a leading foundry and semiconductor innovator. While Tan’s aggressive cost-cutting and potential pivot to 14A signal a pragmatic approach to addressing INTC’s challenges, the prospect of a costly 18A write-off and ongoing struggles to secure foundry customers highlight the steep road ahead for Intel’s recovery.

Greenbrier Companies (GBX +19%) is trading sharply higher after releasing its Q3 (May) results. While there were only two estimates, the company reported well ahead of analyst expectations. This supplier of freight railcars and marine barges can have varying results quarter to quarter; however, Q3 marked a return to upside reporting in both EPS and revs on a sequential and yr/yr basis. As such, investors are buying back into the stock after Q2 (Feb) showed worrying signs about the macro environment.

• While revenue was up only 2.7% yr/yr, it was up 11% sequentially to $842.7 mln and remains on track to achieve revenue guidance for FY25. GBX delivered 5,600 new railcars in Q3 with manufacturing gross margin remaining steady at 13.6%.
• Fleet utilization remained high at 98%, with the lease fleet growing modestly from the prior quarter, reflecting opportunistic additions and a strategic approach giving the macro backdrop.
• GBX's global new railcar backlog remains healthy at nearly 19,000 units, which supports its revenue outlook. Management also expressed confidence in demand for the back half of the year and into FY26, noting that the sales pipeline and inquiry levels are "definitely up."
• An important note on the backlog: management stated that several thousand additional railcars, as many as 3,000, are not included in the figure, as they are a part of railcar restoration activity. Restoration is a big part of GBX's production and given that it is not included in an already healthy backlog, is another good sign for GBX.
• What's exciting investors are the catalysts GBX sees to help boost demand heading into FY26. The near completion of its insourcing capacity expansion in Mexico is expected to deliver its full value as production scales through FY26.
• Additionally, the budget bill passed yesterday includes tax policy that management believes will energize markets for capital goods, such as railcars. Management also expects the 45Z renewable fuels bill to drive demand due to its benefits in the ethanol and soybean crush sectors.

Overall, it was a nice bounce back quarter for GBX after it saw some selling action following its Q2 report. The strong backlog shows management is confident in its near-term outlook. Shares were trading flat around $45 over the last month, so the big bump today shows investors are confident about the improvements from Q2 and the catalysts that GBX sees going into its final quarter of the fiscal year.