Lowe’s vs. Home Depot: Which Benefits More From Lower Rates?

Written by Dan SchmidtAs markets continue their AI-fueled march to new highs, it’s easy to ignore some of the stocks getting left behind in the rush.

When large-cap stocks like Advanced Micro Devices Inc. (NASDAQ: AMD) are soaring 25% and adding $80 billion to their market cap in a single session, who has time to concentrate on the laggards?

But one area of the market that has lagged could soon get a boost from the Fed’s interest rate easing policy: home improvement.

Home Depot Inc. (NYSE: HD) and Lowe’s Companies, Inc. (NYSE: LOW) have significantly underperformed the S&P 500 this year. Could lower interest rates finally spur these two stocks into action?

2025’s Cold Housing Market Has Dragged Home Depot and Lowe’s

The S&P 500 has returned over 13% year-to-date (YTD), but HD and LOW shares have traded with red numbers next to their tickers for most of 2025. While both companies have produced solid earnings (and actually grew comparable sales in Q2), the stocks have lagged, primarily due to high interest rates and a slowdown in home sales.

The retail sector has always been a cyclical industry, but this factor is particularly pronounced in home improvement stores, since renovations often require customers to tap into their home equity or utilize home equity lines of credit (HELOCs).

The high-interest-rate environment hasn’t just stymied home sales, it has also silenced the home renovation and construction industries. Professional builders are paying higher rates for loans, and homeowners are postponing projects until they can secure more favorable terms on their equity. Couple this environment with rising prices on materials like lumber and steel due to tariffs, and you’ve got a recipe for a frozen housing market.

Home Depot held its conference call for fiscal Q2 2026 earnings before the market opened on August 19, reporting results slightly below expectations despite comp sales growing 1% year-over-year (YOY).

The company cited soft demand for big-ticket projects as a reason for the miss.

Lowe’s reported more of the same during its fiscal Q2 2026 release pre-market on August 20, anticipating a flat market due to a healthy but cautious consumer base.

Lowe’s DIY Customer Base Makes It More Sensitive to Rate Changes

One of the key differences between the two companies is where the bulk of their sales emanates from.

Home Depot has taken strategic initiatives to improve its supply line for professional contractors and builders, with the Pro segment now accounting for more than 50% of total revenue, according to Stansberry Research.

The company acquired SRS Distribution in 2024 and GMS in 2025 to boost the availability of heavy-duty materials and products in its Pro ecosystem. Since contracted construction jobs aren’t as price sensitive as Do-It-Yourself home remodeling, the expansive Pro segment gives Home Depot some protection from interest rate sensitivity.

Additionally, Home Depot generates just under $160 billion in annual sales, which nearly doubles the $83 billion figure from Lowe’s.

On the other hand, Lowe’s focuses on the DIY home renovation market, with approximately 70% of its revenue derived from discretionary spending rather than contracted jobs. This market is far more susceptible to interest rates and economic sentiment, which could explain why LOW shares are down 10% over the last 12 months compared to just 5% for HD.

Last year, Lowe’s announced a Total Home Strategy to improve its Pro market share and accelerate online sales. The company is implementing an AI framework to assist with recommendations and a product marketplace to bring in new sellers and expand its product catalog.

Despite its recent Pro expansion, Lowe’s remains at a capital disadvantage to Home Depot and is more dependent on cyclical business trends. These variances are likely why HD trades at a higher multiple to LOW, but they also present an opportunity for the smaller firm.

If interest rates decline rapidly, Lowe’s could experience elevated sales growth due to the unlocking of ‘trapped’ equity and home sales. Home Depot’s sales growth is more stable, but Lowe’s may offer more upside potential if mortgage rates decline faster than anticipated.

Volatile Charts Suggest Caution in the Short Term

Investors with a higher risk tolerance may prefer the upside of Lowe’s to the stability of Home Depot.

However, their stocks still face an uphill battle in 2025. Hopes of a 50-basis-point rate cut provided a minor rally for both stocks in late summer, even leading to the formation of a bullish Golden Cross.

However, this proved to be a false signal, as both stocks immediately reversed course following the Fed’s announcement of a 25-basis-point cut. LOW and HD share prices both plunged below the 50-day SMAs and are now approaching a crucial level above the 200-day SMA.

Regardless of which stock you prefer, the shrewdest move might be to remain in ‘wait and see’ mode. Looser monetary policy will take some time to filter into the broader economy, even if the Fed follows a faster pace of cuts.

Keep an eye on HD and LOW shares as they approach the 200-day SMA and Oversold status on the Relative Strength Index (RSI). These will be the key short-term metrics to watch before mortgage rates start coming down.

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These 5 Beaten-Down Tech Stocks Could Catch Fire Next

Written by Thomas Hughes

Short interest is a powerful market force that can not only cap gains but drive share prices lower, but not always. Sometimes, even the short sellers get things wrong. Companies that look troubled really aren’t, and they set the underlying stock up for robust rallies.

The higher a stock’s price gets above the point of short sale, the more a short seller loses and the greater the impetus to close the position. If the short interest is sufficiently high, as it is with the technology stocks on this list, the scramble to buy shares and close positions can result in a supply deficiency that causes share prices to rocket higher.

SoundHound AI: Short-Covering Is Already Underway

The price action in SoundHound AI’s (NASDAQ: SOUN) stock suggests that short-covering is already underway. The price action is up by 200% from the 2025 lows and 50% from the start of Q3, having broken through several critical resistance targets. It is likely to head higher due to factors including its robust deal pipeline, revenue growth, profitability, and positive analyst sentiment trends. They include increasing coverage, upgrades, a Moderate Buy rating, and price target increases.

The consensus lags behind the stock price as of early October, but the trend is pointing to the high-end range, which is likely to increase following the Q3 earnings report. The short interest in late September was over 30%, down from the recent peak but sufficiently high to produce a short squeeze and/or sustain a short-covering rally.

Tempus AI: Moving Past Critical Resistance

Tempus AI (NASDAQ: TEM), whose short interest topped 27% in September, may see its uptrend accelerate due to short-covering as its price has crossed a critical resistance point. That point aligns with historical highs and sets the market up for a significant upswing, which could leave the market in the $130 to $140 range.

The trigger for this move could come with the Q3 earnings report, which is expected to include another 80% increase in revenue and favorable guidance updates. As it stands, the company’s growth is forecasted to slow, but it is likely to be cautious. The company is transitioning from a purely services business to an AI infrastructure provider for healthcare, an as-yet untapped AI sub-industry.

Market Support Improves for OpenDoor Technologies

OpenDoor Technologies’ (NASDAQ: OPEN) short interest approached 27% in late September as short-sellers sold into the rally to cap gains. However, market support for this stock is rising, as evidenced by Jane Street’s recent purchases. Its stake is nearly 6% of the shares, and other institutions are also buying.

The institutional activity was bullish in Q2 and Q3, lifting institutional interest to over 62% even while analysts’ sentiment soured. The catalyst for the short squeeze could be Q3 reporting strength; the analysts have set the bar low, with 83% having lowered their estimates during the quarter, and the consensus forecasts a significant contraction despite recent strength in housing data. Existing home sales increased in September as mortgage rates fell.

AST Space Mobile About to Unleash Revenue Strength

AST Space Mobile’s (NASDAQ: ASTS) 20% short interest is deserved due to its pre-revenue condition and execution risks. However, company updates reveal that its network of satellites is rapidly growing, and the outlook for coverage is solid, suggesting the fears were misplaced. The critical detail is that coverage is increasing with each launch, putting it on track to begin honoring contracts, billing, and recognizing revenue, which will be robust.

The company has contracts with the most major mobile carriers, in addition to the US government, which assures its position within the telecom industry. The consensus forecasts ASTS revenue to grow by over 2,500% in Q3, sustain a quadruple-digit pace for four quarters, then slow to a double-digit but still hyper pace for the following few years.

Etsy Builds an AI Platform for Consumers

It is still in the early stages, but Etsy (NASDAQ: ETSY) is working to become an AI platform for e-commerce. Its latest move is a deal to embed ChatGPT into its checkout process, enabling a seamless experience for consumers. The analysts’ response to the news is favorable, including a price target increase from BTIG, which places this highly-shorted stock above a critical resistance point.

A move to BTIG’s $81 target would put this market into a technical reversal that institutions are supporting. MarketBeat’s data reveals that the institutions, which own nearly 100% of the stock, have been buying in 2025 and provide solid support near early October price points.

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Falcon Flex Drives Growth as CrowdStrike Bets on AI Security

Written by Chris Markoch

CrowdStrike Holdings Inc. (NASDAQ: CRWD) stock is up 43% in 2025. That’s about 3x the gains in the S&P 500, making the stock one of the best growth stories in the entire market. Much of this is due to the company’s strong revenue growth from its AI-native Falcon platform.

Through its subscription-as-a-service (SaaS) model, CrowdStrike is helping companies take a targeted approach to their cybersecurity needs. This is evident in the company’s impressive year-over-year revenue growth, most of which is in the form of annual recurring revenue (ARR).

However, like many companies in the technology sector, CrowdStrike faces a key obstacle in its valuation. CRWD stock is delivering growth that merits a premium price, but it will take some time for the company to grow into its current valuation.

Falcon Flex Accelerates Adoption Across Cybersecurity Modules

The cybersecurity sector, along with—and largely because of—artificial intelligence (AI), is one of the two most important sectors for investors to own in the next decade. The company’s Falcon Flex platform allows customers to take an a la carte approach to their cybersecurity needs.

As of October 2025, the platform has approximately 30 modules, covering:

• Cloud Security
• Next-Gen Identity
• LogScale Next-Gen SIEM

Most recently, CrowdStrike added Falcon for information technology (IT). These modules provide tools to handle security and IT operations, extending their utility beyond core cybersecurity and adding to the company’s total addressable market (TAM).

In CrowdStrike’s August 2025 earnings presentation, it cited impressive usage statistics regarding module adoption rates:

• 48% of its customers used 6 or more modules

• 33% of its customers used 7 or more modules

• 23% of its customers used 8 or more modules

What’s particularly relevant to these numbers is that the company continues to grow its ARR after offering several of its customers one or more modules for free after the company’s highly publicized outage in the summer of 2024. That means that customers aren’t just sticking with CrowdStrike, they’re adding to their commitments.

Leading Security’s Shift Into the Agentic AI Era

As part of CrowdStrike’s Fal.Con 2025 Investor Briefing, chief executive officer (CEO) George Kurtz declared CrowdStrike to be a leader in what he calls “the Agentic Era.” This is a new phase of cybersecurity designed for a world where artificial intelligence systems act autonomously.

As Kurtz describes it, traditional endpoint protection and even cloud-native defenses are no longer sufficient, because AI itself has become both a target and a potential threat vector. CrowdStrike’s approach is to secure the entire AI stack—from infrastructure and data to software and identities—through a unified platform that protects not just human users, but also machine and agentic identities.

Specifically, the company has launched its new Pangea module, which extends detection and response (DR) to AI environments. It offers “AI Detection and Response” and “AI Guardrails” that monitor model behavior for prompt injection, data leakage, and misuse. This next-generation approach allows security teams to detect anomalies in real time, even when threats arise from the AI models themselves rather than human attackers.

By unifying data, detection, and defense across human and non-human identities, CrowdStrike is positioning itself not only as a cybersecurity leader but as the protector of the AI ecosystem itself. This distinction could define the next decade of growth in the security industry.

Valuation Remains the Only Threat to the Bull Case

Justifiably or not, valuation is a sticking point for CRWD stock investors. The company’s rapid growth has brought with it significant investor interest. However, the stock has become expensive.

At the midpoint of the company’s most recent full-year guidance, it will bring in $3.66 in earnings per share (EPS). But for many investors, that’s not enough to justify a stock price of over $489 per share as of Oct. 7, particularly one with a trailing twelve-month price-to-earnings (P/E) ratio of around 137x, nearly double the sector average.

This is where it’s critical to understand what kind of investor you are as it relates to CrowdStrike. If the company achieves its target of $20 billion in ending ARR by fiscal year 2036, its stock will become significantly more appealing.

In fact, revenue growth of that magnitude, assuming analysts maintain the same revenue multiple, would put CrowdStrike’s market cap between $400 billion and $500 billion, putting it in the same category as the largest cloud/software companies.

But that growth won’t come in a straight line. After hitting its all-time high in July 2025, CRWD stock dropped almost 20% in two months. However, investors who bought that dip have been rewarded with a nice gain of over 14% in the last month, which is expected to last for several quarters.

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