Home / Business and Economy / Stocks Plummet on Earnings Misses as Market Nears Peaks
Stocks Plummet on Earnings Misses as Market Nears Peaks
7 Aug
Summary
- Stocks fall 7.4% on average for missing earnings, far exceeding typical 3.2% drop
- Only companies beating both sales and earnings see positive stock reactions
- Investors have "no patience" for earnings misses in 2025's record-high market
As of August 7th, 2025, the 2025 corporate earnings season has seen stocks facing harsher-than-usual punishment for missing Wall Street's expectations. According to data from Evercore ISI, companies that have missed analysts' estimates for earnings per share and sales have seen an average one-day decline of 7.4% - far exceeding the typical 3.2% drop over the past five years.
This trend has extended to companies that beat one of Wall Street's estimates while missing on another, with their stocks also falling more than average. In fact, the only companies posting positive stock reactions in the trading session following their financial releases are those that have topped estimates for both sales and earnings per share.
With the market trading near record highs, investors have shown little patience for anything short of "perfect" results this earnings season. Analysts had warned earlier in July that earnings misses would likely be "punished a lot more than usual", and that prediction has certainly come to pass, with examples like Novo Nordisk's 20%+ dive and Super Micro Computer's nearly 20% decline.
Even companies reporting good results have seen their stocks fall if the numbers weren't good enough, as evidenced by the 6%+ drop in AMD's share price and Uber's 1%+ slide despite topping sales expectations.
