Limited Market Reaction to Iran — But Wall Street Faces Broader Headwinds
- Jun 24, 2025
- 15 min read
Tuesday, 24th of June
share on social:
What's Moving The Market
Weekend headlines were dominated by the U.S. airstrike on Iran. Iran’s counterattack on a U.S. base in Qatar was relatively mild in comparison. Iran had informed the U.S. in advance about the strike. Market reactions have remained limited.
Can Wall Street breathe a sigh of relief?
Even if tensions in the Iran conflict ease and geopolitical headlines fade into the background, that doesn’t automatically mean the lights turn green again on Wall Street. In addition to high valuations and deteriorating market breadth — with only a few tech stocks keeping the rally alive — signs of an economic slowdown are increasing. According to UBS, it is still too early to say whether this marks a sustainable trend reversal.
UBS Conclusion: The overall picture suggests it’s not the time to chase the rally. Growth-oriented defensive stocks are coming into focus over the summer months. It’s too early for a contrarian move against tech and AI themes. Utility and software companies in particular have shown strong earnings revisions, which help to mitigate valuation and positioning risks. Top picks include Broadcom, Qualys, Zscaler, and Pure Storage.
In contrast, consumer sectors such as housing, personal care, durable goods, retail, and the auto industry remain vulnerable — with further downside risk if economic weakness continues. Among the lowest-rated names are Polaris, American Eagle, HP, and Deckers.
Last Week
Markets across the globe faced a cautious trading week as geopolitical tensions in the Middle East stirred short-term volatility. U.S. indices ended mixed, with the S&P 500 and Nasdaq pulling back slightly, while the Dow edged higher—reflecting sector-specific rotation rather than broad-based weakness.
Energy and financials drew investor attention, buoyed by rising oil prices and expectations of sustained Fed policy.
Tech and growth stocks saw mild profit-taking, especially after a strong recent run.
Meanwhile, hedge funds ramped up leverage, aggressively rotating into financials, according to Goldman Sachs. The market remains watchful as valuation levels stay elevated—the S&P 500 is trading near 23× forward earnings.
Despite the noise, markets showed resilience, holding near record levels. The focus now turns to earnings updates, inflation data, and further developments in global risk hotspots.
Key Index Moves (Weekly):
– S&P 500: ▼ ~0.2%
– Nasdaq: ▼ ~0.5%
– Dow Jones: ▲ ~0.1%
Reported Quarterly Earnings
Accenture (CAN)
Q3 Highlights:
Revenue: $17.73 billion (+8% YoY), surpassing consensus of ~$17.3 billion
Consulting: $9.01 billion (+7%)
Managed services: $8.72 billion (+9%)
Adjusted EPS: $3.49 (+15% YoY), beating forecast ~$3.32–3.31
GAAP net income: ~$2.2 billion
Bookings: $19.7 billion, down ~6% YoY, below consensus ~$21.5 billion
Operating margin: 16.8%, up ~40 bps YoY
Free cash flow: $3.5 billion; $1.8 billion returned to shareholders through dividends and buybacks
Strategic Updates:
Guidance raised: Full-year revenue growth now expected at 6–7% (from 5–7%) and FY25 EPS targeted at $12.77–$12.89
Gen-AI momentum: AI-driven bookings reached $1.5 billion; Gen-AI services generated >$700 million in Q3
Organizational restructure: Consolidating consulting, tech, and operations into a new Reinvention Services unit led by Manish Sharma (effective Sept 1), along with key leadership changes
Market Reaction:
Shares plunged ~7–11% post-earnings despite financial beats, primarily due to the drop in bookings and cautious commentary on federal sector headwinds
Federal segment expected to be ~2% revenue headwind in Q4 due to U.S. government budget cuts
Analyst note: Revenue and EPS guidance increases welcome, but concerns remain about weaker new bookings and possible softness into FY2026
----------
Carmax (KMX)
Quarterly Highlights:
Revenue: $7.55 billion (+6.1% YoY), slightly above consensus estimates of ~$7.51 billion
Adjusted EPS: $1.38 (+42% YoY), well ahead of the ~$1.16–1.17 consensus
Same-store used vehicle sales: +8.1%, reflecting strong retail demand
Units sold: ~380,000 used vehicles (retail + wholesale), up ~5.8% YoY
Gross profit: $893.6 million (+13% YoY); retail unit gross profit at a record ~$2,407 (+$60)
SG&A leverage: Improved cost control—SG&A rose just 3.3%, reducing the ratio of SG&A to gross profit to 73.8% from ~80.6%
Finance Segment (CarMax Auto Finance - CAF):
CAF income: Declined slightly to $141.7 million due to increased loan loss provisions (+25%)
The company is restructuring its credit approach, reclassifying $638 million of non-prime loans as held-for-sale to boost flexibility
Strategic Initiatives:
AI integration: Launched a virtual assistant that improved customer support efficiency by ~30%
Omnichannel strength: 80% of sales supported digitally—57% through omnichannel and 23% fully online
Share buybacks: Repurchased ~$200 million in shares this quarter; approximately $1.74 billion remains authorized
Market Reaction:
Stock reaction: Shares rose ~4.6–6.2% on the day of the results
Analyst view: RBC Capital upgraded the stock to Outperform, raised the price target to $81, applauding strong unit comps and SG&A efficiency, though cautioning on loan provisions and macro risks
Risk factors: Tariffs on new vehicles may fuel used-car demand but could strain auto parts costs. Credit quality remains a watchpoint due to elevated loan loss provisioning
----------
Darden (DRI)
Key Metrics:
Total Revenue: $3.27 billion, up 10.6% YoY, beating expectations (~$3.26 billion)
Adjusted EPS: $2.98, slightly above the $2.97 consensus
Overall growth: +4.6%
Olive Garden: +6.9%
LongHorn Steakhouse: +6.7%
Expansion & Acquisitions:
25 net new restaurant openings
Acquired 103 Chuy’s Tex Mex–boosting "Other Business" revenue significantly (+22% to ~$722 million)
Shareholder Returns:
Announced a new $1 billion share repurchase program
Raised the quarterly dividend by 7.1% to $1.50/share
Strategic Moves & Challenges:
Exiting underperforming Bahama Breeze brand: closed 15 locations with 22 total restaurant closures in Q4
Focusing on value-driven promotions and delivery expansion (nearly 20% growth in takeout & delivery)
Market Reaction:
Shares rose ~4.5% intraday on the day of the announcement
Darden stock hit a new all-time high, driven by:
Strong same-restaurant sales, especially at Olive Garden and LongHorn Steakhouse
Better-than-expected revenue and EPS
Announcement of a $1 billion share buyback and a 7% dividend increase
Investors also welcomed Darden’s strategic focus: exiting weaker brands (e.g. Bahama Breeze) and expanding high-performing segments
Analysts:
Analysts praised the results for margin discipline, steady consumer demand, and operational efficiency. Some noted the slightly conservative FY2026 EPS guidance, but saw it as prudent rather than negative.
Analysts View: Upgrades and Downgrades
ASML (ASML)
Bernstein Initiates Coverage on ASML with “Market Perform”
Analyst Sara Russo at Bernstein has initiated coverage of ASML with a “Market Perform” rating and a price target of $806. She launches her coverage of the European semiconductor sector with the view that advanced packaging and new materials will be key to improving chip performance in the future.
Traditional lithography and feature shrinking, once the main performance drivers, are becoming less profitable.
While ASML maintains clear dominance in EUV lithography, Russo notes that this segment absorbs a disproportionate share of capex in cutting-edge logic manufacturing — with declining returns.
She expects the capital intensity of EUV investments to decline over time.
----------
Cisco (CSCO)
Deutsche Bank Upgrades Cisco to “Buy,” Raises Price Target to $73
Analyst Matthew Niknam at Deutsche Bank has upgraded Cisco from “Hold” to “Buy” and raised the price target from $65 to $73.
Key reasons for the upgrade:
Diversified supply chain allows Cisco to make targeted investments in high-growth, high-margin segments
Strong resilience to market volatility, including trade-related disruptions
Strategic shift from hardware to software, reducing dependency on hardware and improving earnings quality
Outlook: Cisco is better positioned to navigate economic headwinds and tap into higher-margin opportunities, making the stock more attractive.
----------
IBM (IBM)
IBM Price Target Raised to $320 on Growth Transformation
Bank of America analyst Wamsi Mohan has raised the price target for IBM from $290 to $320, maintaining a “Buy” rating. He argues that bears are clinging to IBM’s pre-2020 reputation as a value trap, but the company has undergone a major transformation over the past five years. IBM has shifted its focus to strategic software M&A and exited slower-growth, cost-heavy segments.
Mohan believes this transformation positions IBM for accelerated revenue growth going forward. He sees valuation upside tied to the company’s ongoing strategic shift and believes investors should now view IBM through a different lens than its legacy business history.
----------
Marvell (MRVL)
Marvell Target Raised to $90 on Custom Compute and AI Growth Potential
Bank of America analyst Vivek Arya raised his price target for Marvell Technology from $80 to $90, reiterating a “Buy” rating. The upgrade follows a special event focused on Marvell’s ASIC (Custom Compute) segment, which is central to its AI strategy.
Arya believes the AI update should reassure investors and help the stock narrow the gap with other AI peers. He sees the company’s conceptual EPS potential at ~$8 by 2028, significantly above both:
The ~$6 estimate based on last year’s total addressable market
And the current Wall Street consensus of $5, implying nearly 60% upside
----------
Micron Technologies (MU)
Micron Price Target Raised to $150 by Wedbush and Wells Fargo
Wedbush analyst Matthew S. Bryson raised his price target for Micron from $130 to $150, maintaining an "Outperform" rating. He notes that memory pricing trends in Q2 were stronger than expected. While Wedbush no longer expects as sharp a rebound in Q3 as it did in March, they still anticipate rising DRAM and NAND prices in the coming quarters. The improved fundamentals are attributed to a pickup in enterprise/server demand starting in April, expected to continue throughout the year, driven by AI and traditional workloads performing better than previously forecast.
Wells Fargo analyst Aaron Rakers also raised his price target for Micron from $130 to $150, maintaining an "Overweight" rating. He expects Micron’s upcoming Q3 results to reflect continued positive DRAM momentum, fueled by data center and AI demand. While NAND demand remains soft, he sees this being offset by greater supply/demand discipline within the industry.
----------
NetEase (NTES)
Jefferies Raises NetEase Price Target to $155, Reaffirms “Buy” Rating
Jefferies analyst Thomas Chong has reiterated his “Buy” rating on NetEase, while raising the price target from $131 to $155.
Rationale for the upgrade:
Positive catalysts expected for the gaming sector in the second half of the year
Gaming industry seen as defensive in the current macro environment
NetEase benefits from a strong balance sheet and regular dividend payouts
In the Cloud Music segment, Chong sees strong potential for recurring subscription revenue and continued growth
Conclusion: NetEase is well positioned both financially and strategically to benefit from sector tailwinds and monetisation opportunities.
----------
Netflix (NFLX)
Netflix Price Targets Raised to Street Highs on Strong Growth Outlook
Pivotal Research analyst Jeffrey Wlodarczak has raised his price target for Netflix from $1,350 to $1,600 — the highest on Wall Street — while maintaining a “Buy” rating. His view is based on confidence in Netflix’s dominant market position, despite what he sees as continued global underpenetration. He describes Netflix's value proposition as “extremely compelling,” especially bolstered by its ad-supported tier, which he believes will support strong subscriber growth and ARPU (average revenue per user) expansion. Wlodarczak also continues to back Netflix management’s ambitious goal of reaching a $1 trillion valuation by 2030.
Wells Fargo analyst Steven Cahall raised his target from $1,222 to $1,500, reiterating an “Overweight” rating. He believes high-quality short-form content could be Netflix’s next major growth driver, alongside sports and advertising. He sees potential in Netflix locking in exclusive deals with short-form creators, forming a third pillar of growth.
----------
Nike (NKE)
Barclays Cuts Nike Price Target to $53, Maintains ‘Equal Weight’
Barclays analyst Adrienne Yih lowered the price target for Nike from $60 to $53, maintaining an “Equal Weight” rating. Ahead of Nike’s Q4 earnings report, Yih remains cautious on the stock.
She expects that franchise lifecycle management, a return to wholesale, tariffs, and China-related risks will weigh on performance in FY 2025/26. Yih said she would take a more constructive view if Nike’s sales-to-inventory growth ratio improves, or if future estimates carry less downside risk.
While investor sentiment remains cautious, the Q4 report will likely be less about past results and more about forward-looking commentary:
Outlook for Q1
Impact of tariffs
Mitigation strategies
FY 2025/26 expectations
Morgan Stanley Lowers Nike Price Target to $61
Analyst Alex Straton has cut the price target for Nike from $70 to $61, maintaining an “Equal Weight” rating on the stock.
She sees potential upside to Q4 EPS, but warns that FY2025/26 EPS expectations are too high.
A lack of demand momentum and limited innovation signals from the retail channel weigh on the outlook.
Despite the cautious stance, Straton notes that the bearish sentiment may set the stage for positive surprises to be rewarded by the market.
Goldman Sachs Reiterates “Buy” on Nike, Sees Strategic Progress Amid Margin Concerns
Goldman Sachs analyst Brooke Roach has reaffirmed her “Buy” rating on Nike, maintaining the price target at $72.
Key points:
Many investors expect FY 2025/26 guidance to fall short of consensus
While growth acceleration initiatives may be welcomed, there is still uncertainty around margin improvement
Goldman Sachs data suggests recent product innovations and refreshed marketing are resonating better with consumers
This improved consumer response could build confidence in Nike’s strategic direction
Early signs point to positive momentum from recent strategic decision
Summary: While investor expectations for guidance are cautious, Goldman sees promising signs in Nike’s product and marketing strategy that could support long-term upside.
----------
NVIDIA (NVDA)
Barclays Raises NVIDIA Price Target to $200
Analyst Tom O’Malley has raised the price target for NVIDIA from $170 to $200, maintaining an “Overweight” rating.
Following a supply chain review post-Q1 earnings, he sees $2 billion upside to July revenue consensus.
His Compute segment estimate increased from $35.6B to $37B.
Blackwell production reached 30,000 wafers/month in June, slightly below Barclays’ earlier forecast of 40,000.
Despite this, utilisation remains healthy, and the supply outlook for H2 2025 is positive.
----------
Oracle (ORCL)
Guggenheim Raises Oracle Price Target to Street-High $250, Reiterates “Buy”
Guggenheim analyst John DiFucci has raised his price target on Oracle from $220 to $250, now the highest among all Wall Street analysts covering the stock. The “Buy” rating is maintained.
DiFucci believes Oracle is on the verge of a major transformation, decades in the making through technological innovation. While the timing of bookings and capacity ramp-ups is uncertain, Guggenheim expects revenue, operating income, and EPS to grow meaningfully in FY 2026 and FY 2027.
Following a virtual meeting with Ken Bond, Oracle’s SVP of Investor Relations, DiFucci commented that the company’s long-term goal of $104 billion in revenue by FY 2029 may actually underestimate its potential.
He compared the current momentum to the early 2000s, when application clusters and enterprise demand powered a multi-year rally in the stock.
----------
Robinhood (HOOD)
Mizuho Raises Robinhood Price Target to $80
Analyst Dan Dolev has increased his price target for Robinhood from $65 to $80, maintaining an “Outperform” rating.
The update follows strong May metrics, which exceeded expectations and lifted Q2 forecasts for revenue and adjusted EBITDA.
Mizuho expects major announcements at Robinhood’s “To Catch a Token” event on 30 June, likely focused on digital asset integration into traditional finance.
The analyst believes Robinhood deserves a premium valuation versus other fintechs due to:
its rapid growth capability
expansion into new products and markets
targeting a $600 billion total addressable market
----------
Roblox (RBLX)
Oppenheimer Boosts Roblox Price Target to $125, Reaffirms “Outperform”
Oppenheimer analyst Martin Yang has raised his price target for Roblox from $80 to $125, maintaining an “Outperform” rating despite the stock’s 76% rally since April 10.
Yang highlights Roblox’s:
Rapid content production
Strong tech infrastructure
Global reach
Underutilised monetisation features
These elements make Roblox a compelling long-term investment.
Oppenheimer hosted virtual fireside chats this week with five top Roblox studios, including Splitting Point Studios, creator of Grow a Garden—which recently became the world’s most-played game.
Yang is increasingly bullish on Roblox’s sustainable growth, ad potential, and its ability to gain market share from rival platforms. Estimates for Q2 and FY2026 have been revised upward.
----------
Salesforce (CRM)
Salesforce Price Hike Highlights AI Monetisation Push
Barclays analyst Raimo Lenschow reports that Salesforce announced a 6% price increase and introduced new AI product packaging. He sees this as a natural evolution of Salesforce’s AI strategy and believes the price change will support growth into FY2025/26 and beyond.
Rating: Overweight
Price Target: $347
Stephens analyst Brett Huff adds that the new pricing applies to several product lines and reflects the integration of AI value-added features. Alongside the Flex Credit system launched in May, the move appears designed to support both user adoption and revenue growth.
He notes that Salesforce seems to be balancing AI usage incentives with monetisation goals.
Rating: Equal Weight
Price Target: $309
----------
Spotify (SPOT)
Pivotal Research Raises Spotify Price Target to $900
Analyst Jeffrey Wlodarczak at Pivotal Research has raised his price target for Spotify from $800 to $900, maintaining a “Buy” rating.
The updated target reflects:
A revised valuation of Tencent Music stake
Favourable currency movements
A shift in the valuation base year from 2025 to 2026
Wlodarczak’s bullish thesis remains intact:
Spotify has effectively won the global audio streaming wars
Strengths include a best-in-class user interface and recommendation engine
Global audio streaming still has significant growth potential
This supports price increases without harming subscriber growth
Conclusion: Pivotal sees Spotify as a global streaming leader with continued pricing power and subscriber momentum, justifying a higher long-term valuation.
----------
Taiwan Semiconductor (TSM)
Susquehanna Raises TSMC Price Target to $255, Reiterates “Positive” Rating
Analyst Mehdi Hosseini at Susquehanna has increased his price target for TSMC from $250 to $255, maintaining a “Positive” rating.
Key points:
AI-related wafer shipments in Q2 are expected to offset weaker smartphone demand
Currency headwinds may limit upside to EPS despite operational improvements
TSMC is likely to remain the dominant foundry provider through 2027, as customers show limited commitment to Intel's IFS 14A-E node
Conclusion: TSMC continues to benefit from strong AI demand and maintains its leadership position in advanced semiconductor manufacturing.
----------
Tesla (TSLA)
Tesla: Robotaxi Takes Center Stage as Analysts Diverge on Outlook
Barclays analyst Dan Levy maintains an "Equal Weight" rating with a $275 price target. He expects Q2 deliveries of 375,000 vehicles, about 10% below both last year’s figures and the current consensus of 400,000. However, he believes this decline is likely already priced in, as investor focus has shifted away from fundamentals. Barclays anticipates a “significantly negative” volume outlook for 2025, but sees the upcoming new model as a potential X-factor. The Tesla narrative, according to Levy, is increasingly centred on the robotaxi strategy, with investors more focused on the June 22 reveal and Tesla’s roadmap for autonomous scaling than on short-term delivery numbers.
Wedbush analyst Daniel Ives, in contrast, is highly bullish, maintaining an “Outperform” rating and raising the price target to $500. He describes the June 22 robotaxi event in Austin as the start of Tesla’s “golden age of autonomy”, with ~20 Model Y vehicles beginning operation in a geo-fenced area. Wedbush believes Tesla will roll out the robotaxi service to ~25 U.S. cities over the next year. Ives sees this shift to autonomous driving as one of Tesla’s most pivotal chapters and projects that Tesla’s AI-driven future could alone justify a $1 trillion valuation.
Wells Fargo Reiterates “Underweight” on Tesla, Cuts Delivery Outlook
Analyst Colin Langan at Wells Fargo maintains a “Underweight” rating on Tesla, with a price target of $120.
Key insights:
Q2 deliveries appear flat compared to a weak Q1, underperforming the analyst's expectations
For the full year, Langan now forecasts a 21% year-over-year decline in deliveries
Pressure on EPS and free cash flow is expected due to:
Weaker deliveries and pricing
Lower ZEV credit revenues
Reduced Energy Generation tariffs
Conclusion: Tesla’s fundamentals are deteriorating, and delivery trends suggest a challenging outlook for 2024.
Cantor Fitzgerald Remains Bullish on Tesla Ahead of Robotaxi Launch
Cantor Fitzgerald analyst Andres Sheppard has reiterated his “Overweight” rating on Tesla and maintained the price target at $355.
Highlights:
Focus is on Tesla’s upcoming Robotaxi launch in Austin, Texas
Service to begin with a limited fleet, with plans for expansion to other U.S. cities
The Cybercab is also expected to debut in 2026
Outlook: The analyst sees the autonomous driving rollout as a key catalyst, reinforcing Tesla’s innovation leadership and supporting long-term valuation upside.
What's Coming Up This Week
What to Watch This Week
Geopolitical tension: Markets remain alert as the Iran–U.S. situation has calmed for now, but any renewed escalation could quickly impact oil prices and broader risk sentiment.
Fed narrative: All eyes are on Fed Chair Powell’s testimony before Congress and Friday’s May PCE inflation data. These events are expected to influence expectations around future interest rate decisions.
Corporate earnings: This week’s key reports from Carnival, FedEx, General Mills, Micron, and Nike will provide insight into consumer strength, supply chain pressures, and global demand. Forward guidance and comments on tariffs or restructuring could reshape sentiment across sectors.
Tuesday, June 24
Fed Chair Powell will testify before both chambers of the US Congress on Tuesday and Wednesday. The hearings carry particular weight given the ongoing attacks from President Donald Trump on Powell and his repeated demands for an interest rate cut — a move the Fed has so far resisted.
Cruise giant Carnival will release its Q2 results on Tuesday before the US market opens. The cruise industry has recently stood out as a bright spot in the travel sector, with demand remaining robust. For the past quarter, analysts surveyed by FactSet expect average revenues of $6.21 billion and adjusted earnings per share (EPS) of $0.25.
Wednesday, June 25
FedEx Q4 Report (after market close): projected revenue $21.79 billion, EPS $5.88; investors to monitor commentary on tariffs and Freight spinoff
General Mills is set to report before the market opens on Wednesday. Investors have grown cautious towards consumer and food stocks, influenced by weak consumer sentiment, tariffs, and falling inflation. According to FactSet, analysts expect quarterly revenues of $4.59 billion and EPS of $0.71.
Micron Technology will report its Q3 results after the US market closes on Wednesday. Investors are particularly focused on strong AI-related demand. For the February to May period, FactSet consensus sees revenues of $8.85 billion and EPS of $1.59.
Thursday, June 26
Nike will report earnings on Thursday after the market closes. Analysts expect revenues of $10.71 billion and adjusted EPS of $0.12, according to FactSet. However, management commentary on the impact of US tariffs and progress on company restructuring is likely to outweigh the headline numbers.
Friday, June 27
Core PCE Inflation Data (Personal Consumption Expenditures index) for May – a key Fed gauge
Disclaimer: This content is for informational and educational purposes only and does not constitute financial advice. It does not consider your personal objectives, financial situation, or needs. You should consider whether the information is appropriate for your circumstances and seek professional advice before making any investment decisions. Investing in stocks carries inherent risks, and the application of any strategy may not eliminate the risk of loss. Market conditions, volatility, and unforeseen events can impact outcomes, and past performance is not indicative of future results.
Comments