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HCLTech Shares Plunge 10% After Missing Quarterly Revenue Estimates

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Shares of HCLTech (HCLT.NS) dropped nearly 10% on Tuesday, marking their worst session since September 2015. The decline came after India’s third-largest software services provider missed revenue estimates for its third quarter and adjusted only the lower end of its full-year sales guidance.

Revenue Miss and Analyst Reactions

HCLTech reported a 5.1% year-on-year rise in consolidated revenue to 298.9 billion rupees ($3.45 billion), falling short of analysts’ expectations of 300.68 billion rupees. The miss was attributed to underperformance in the company’s software business.

Following the earnings release, at least 11 brokerages downgraded their ratings on HCLTech, and four brokerages reduced their price targets, according to LSEG data.

Guidance and Market Sentiment

Despite the disappointing results, HCLTech CEO C Vijayakumar projected an improving demand environment in 2025, echoing optimism expressed by larger competitor Tata Consultancy Services (TCS). The company revised its fiscal year 2025 revenue growth forecast to 4.5%-5% from the earlier 3.5%-5%, factoring in acquisitions.

However, analysts remain cautious. Goldman Sachs noted that the midpoint of HCLTech’s revised revenue guidance fell slightly below expectations, citing weaker growth in the software segment and the gradual ramp-up of discretionary projects. Sanjeev Hota, vice president at Mirae Asset Sharekhan, commented that the lack of an increase in the upper range of revenue guidance further dampened investor sentiment.

Market Performance

HCLTech’s shares were the worst performers on India’s blue-chip Nifty 50 index (.NSEI), which rose 0.5% on Tuesday after a 1.5% drop in the previous session. Despite Tuesday’s plunge, HCLTech had outperformed its peers in 2024, posting a 31% gain compared to a 22% rise in the Nifty IT index (.NIFTYIT).

In contrast, competitors Tata Consultancy Services and Infosys recorded gains of 8.5% and 22.5%, respectively, over the same period. On Tuesday, TCS and Infosys shares dipped by 0.31% and 0.61%, respectively.

 

Unity Software Shares Surge After Cryptic Post by ‘Roaring Kitty’

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Unity Software’s shares surged nearly 10% on Thursday following a cryptic social media post by Keith Gill, famously known as “Roaring Kitty,” on platform X. The post reignited enthusiasm for the video game software maker, marking a strong start to 2025 after a tumultuous year.

Gill, who rose to prominence during the 2021 meme stock frenzy that fueled GameStop’s dramatic rally, shared a clip referencing late musician Rick James, who featured in a song titled “Unity.” The subtle nod sparked renewed investor interest in Unity’s stock.

If gains hold, Unity could add over $700 million to its market valuation. Shares climbed to a high of $26 on the first trading day of 2025.

Meme Stock Influence

Art Hogan, chief market strategist at B. Riley Wealth, highlighted the impact of meme stock culture, stating, “The leader of the meme stock post on social media, whether it’s Reddit or X, you’re certainly going to see that reaction by that small army of meme stock players — that’s what we’re seeing again today.”

Challenges and Recovery

Unity Software faced a challenging 2024, with its stock plummeting 45% amid backlash over its controversial “runtime fee” pricing policy introduced in 2023. The policy, which sparked outrage among video game developers, was scrapped in 2024.

The company also underwent significant restructuring, cutting 25% of its workforce in 2024 after an 8% reduction in 2023, as it shifted focus toward profitability. Despite these challenges, Unity remains a critical player in the gaming industry, with its software toolkit powering popular titles like Pokemon Go, Beat Saber, and Hearthstone.

Gill’s Influence and Meme Stock Trends

Keith Gill’s influence on stock movements continues to captivate meme stock enthusiasts. However, his past moves have had mixed results. For instance, Gill’s June 2024 livestream failed to generate excitement for GameStop, causing its stock to tumble. Similarly, his dissolved stake in pet retailer Chewy last year had minimal impact on the market.

Thomas Hayes, chairman at Great Hill Capital LLC, expressed skepticism over the sustainability of meme stock trends. “You would think people would have learned by now that playing these silly reindeer games end in tears… it’s not the way to invest,” Hayes remarked.

Unity’s latest rally underscores the persistent influence of social media and meme culture on the stock market, even as traditional investors urge caution.

 

S&P 500 Rises 1% on Christmas Eve, Tech Stocks Drive Gains: Live Updates

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The U.S. stock market saw a strong performance on Christmas Eve, with the S&P 500 gaining 1.1% to close at 6,040.04. The Dow Jones Industrial Average also rose by 0.91%, adding 390.08 points to reach 43,297.03, while the Nasdaq Composite climbed 1.35% to finish at 20,031.13. A significant contributor to the Nasdaq’s rise was a 7.4% increase in Tesla’s stock price, alongside gains in Amazon and Meta Platforms, which each rose over 1%.

The New York Stock Exchange closed early at 1 p.m. ET, and the bond market followed suit, closing at 2 p.m. The market will remain closed on Wednesday for Christmas Day.

Tuesday’s gains marked the beginning of the “Santa Claus rally,” a seasonal trend in which the market tends to see stronger performance during the last five trading days of the year and the first two days of January. Historical data from LPL Research shows that since 1950, the S&P 500 has averaged a 1.3% return during this period, far outpacing the typical seven-day return of 0.3%.

Despite the upbeat performance, experts advise caution. Paul Hickey, co-founder of Bespoke Investment Group, mentioned on CNBC’s “Squawk Box” that while the market shows positive momentum, it’s important to temper enthusiasm, as the market has already rallied significantly.

Over the past two days, the S&P 500 has gained 1.8% for the week, with the Dow up about 1%. The Nasdaq has surged 2.3% week-to-date, fueled by strong gains in megacap tech stocks. Additionally, the S&P 500 has turned positive for the month, rising by 0.1%. The tech-heavy Nasdaq has seen an impressive 4.2% increase in December, with major players like Google’s parent Alphabet up 16%, Apple up nearly 9%, and Tesla soaring by about 34%. However, the blue-chip Dow remains down by around 3.6% for the month, on track for its worst monthly performance since April.

On the corporate front, American Airlines experienced fluctuations in its stock price on Tuesday after the airline temporarily grounded all flights in the U.S. due to a technical issue during one of the busiest travel days of the year. Despite the disruption, the stock ended the session up 0.6%.

In other retail news, analysts at Jefferies expressed optimism about toy sales this holiday season. Their store checks indicated high traffic and lower inventory levels compared to earlier in the season. Board games, in particular, were reported as strong sellers both in-store and online. Jefferies also noted that discounts were lower than the peak Black Friday levels.

In the toy sector, Mattel and Hasbro stocks showed mixed results. While Mattel’s shares are down over 5% year-to-date, Hasbro has seen a more significant gain of 11%. However, Hasbro has faced recent declines, with its stock down nearly 13% month-to-date, while Mattel’s shares have fallen 6%.