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Tech Shocks: DXC Plummets 20%, Reddit Rises 11%

After-Market

By Alex P. Chase

5/16, 17:04 EDT
Doximity, Inc.
DXC Technology Company
Globant S.A.
Take-Two Interactive Software, Inc.
Walmart Inc.
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Key Takeaway

  • Cracker Barrel (CBRL) and DXC Technology (DXC) saw significant after-hours declines of 8.8% and 20% respectively, due to dividend cuts and a disappointing full-year outlook.
  • Conversely, Doximity (DOCS) surged 13% on strong forecasts, while Reddit (RDDT) gained 11% after announcing an AI partnership with OpenAI, highlighting the tech sector's volatility and growth potential.

Tech and Consumer Sectors Stir

The S&P 500 Index experienced a slight retreat of 0.2% to 5,297.10 from its record close on Wednesday, with Walmart standing out amidst a general downturn in most sectors. The after-hours trading session brought significant movements across both the technology and consumer sectors, highlighting the ongoing adjustments and strategic shifts within these industries.

Dividends, Forecasts, and Partnerships

Cracker Barrel (CBRL) saw an 8.8% decrease after announcing a cut in its quarterly dividend to 25 cents per share, a move aimed at reallocating funds towards business investments. Meanwhile, DXC Technology (DXC) faced a 20% drop as its full-year outlook failed to meet expectations, signaling potential challenges ahead for the IT services firm.

Tech Sector Adjustments

In the technology sector, Doximity (DOCS) enjoyed a 13% uptick following a robust first-quarter forecast and impressive fourth-quarter results, showcasing the strength of its clinician-focused app. Conversely, Globant (GLOB) encountered a 6.6% decline after its adjusted EPS forecasts did not align with analyst expectations, reflecting the unpredictable nature of the tech services market.

Gaming and Social Media Moves

The gaming industry saw Take-Two Interactive Software (TTWO) decrease by 3.1% after it announced a delayed release date for Grand Theft Auto VI, impacting its bookings forecast for the current fiscal year. On a brighter note, Reddit (RDDT) surged 11% after revealing a partnership with OpenAI to integrate enhanced Reddit content into ChatGPT, indicating a strategic move to leverage AI technology for content innovation.