RH Stock Rockets on Surprise Profit and Tariff Shift

Written by Chris Markoch

Shares of RH (NYSE: RH) rocketed nearly 20% higher after the company delivered mixed first quarter earnings. Revenue of $814 million missed expectations for $818.1 billion. However, the company posted positive earnings per share of 13 cents. Analysts were expecting negative earnings per share of nine cents, so this wasn’t just an upside surprise, it was a stunner.

Adding fuel to the earnings story was the company’s commentary around tariff mitigation. In addition to missing on revenue and earnings in the prior two quarters, one of the main reasons RH stock fell over 55% in 2025 was uncertainty surrounding tariffs. The U.S.-based company has heavy exposure to China. Or maybe the better word is had.

The company announced that as part of its tariff mitigation efforts, it expects “receipts” (i.e., imports) from China to decrease to 2% from 16% by the end of the year. Furthermore, the company said it expected “a meaningful portion of the tariff” to be absorbed by its vendors.

The cherry on top that must delight the White House is that RH is projecting that 52% of its upholstered furniture will be produced in the United States. Italy will produce 21%.

RH also said that it was delaying the launch of a new concept until 2026, when it will have more clarity about tariffs.

Will Investors Overcorrect?

The sharp spike in the RH stock price has caused it to push above its 50-day simple moving average (SMA). That’s a bullish sign, but it may also indicate a stock that’s run too far too fast. The company still expects to feel the impact of supply chain disruptions following Liberation Day in the coming quarter.

That means the real growth won’t happen until the back half of the year. Are investors simply pulling those gains forward? It’s possible. It’s also possible that there could be a slight pullback when the market opens on June 13.

It’s also important to note that short interest in RH stock is around 20%. But when you factor in that the CEO owns about 18% of the company’s stock, that percentage is higher. That means this could be a short squeeze.

RH Continues to Bet on Itself

One area that investors may not be bullish on is the level of debt that remains on RH’s balance sheet. The company’s long-term debt grew from 2019 to 2023 as RH bought back about half of its outstanding shares.

That level of buying by itself would constitute a big bet. However, it was the financing of that debt through convertible notes and other debt instruments that raised the stakes.

In this case, the gamble paid off, until it didn’t. Rising interest rates and weakness from the company’s core consumer caused a steep drop in earnings. At one point, RH stock dropped over 60%.

However, in the press release announcing the company’s earnings, chief executive officer Gary Friedman expressed confidence that the company will be able to weather the current storm and reduce the debt over time.

How to Approach RH Stock?

Retail stocks and consumer staples stocks continue to get battered in 2025. Even though RH targets a more affluent consumer, it’s not immune to the weakness in the housing market.

In fact, the company has announced a promotion that offers a 30% discount to members as opposed to 25%. That’s not a margin-crushing increase, but it also acknowledges that the state of the consumer may continue to be weak.

That said, investors who believe in the turnaround story are getting RH stock at a significant discount. It’s also attractively valued. Even with a price-to-earnings (P/E) ratio of over 50x, it’s trading at a discount to itself.

The RH analyst forecasts on MarketBeat have a consensus price target of $270. That was a 52% increase from the closing price, but it’s narrowed considerably after the after-market gains.

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Synopsys Stock Falls on China Ban, But Long-Term Outlook Holds

Written by Leo Miller

Despite receiving only a fraction of the attention of AI-chip designers, Synopsys (NASDAQ: SNPS) is a company deeply important to the semiconductor industry. Synopsys’s electronic automation design (EDA) software is essential to developing these and many other chips, making it an important part of the industry to understand and potentially invest in.

However, Synopsys shares have seen disappointing performance recently. As of the June 11 close, they are down approximately 13% over the past 52 weeks. Recent news related to China and Trump isn’t helping. So, what are the recent developments surrounding Synopsys? Additionally, does this vital company still have the potential for significant long-term share price appreciation?

Synopsys Gets Whacked as Trump Shuts Down EDA Sales to China

On May 28, shares of Synopsys dropped nearly 10%. This was in reaction to news that the Trump administration ordered Synopsys and other EDA companies to halt sales to China. This would be far from a trivial loss of business for Synopsys. Around 10% of the company’s revenue came from China last quarter. The restriction underscores Synopsys’s importance in developing advanced chips. U.S. government officials see cutting China off from Synopsys’s software as a way to slow their development of this technology.

This was a dark cloud that hung over the company’s solid financial results, which came out the same day after the market’s close. The company beat estimates on sales and adjusted earnings per share (EPS). The two figures grew by 10% and 22% from the previous year’s quarter, respectively.

Synopsys said on the earnings call that it had not received a notification of this restriction from the administration. However, that notice came the next day. This led the company to suspend its fiscal Q3 and full-year 2025 guidance.

Although this restriction is certainly not good news for Synopsys, it also isn’t the backbreaker it may initially seem. The company’s revenue contribution from China declined from 15% in fiscal Q2 2024 to 10% last quarter. Now, the geography is the smallest contributor of the five it reports.

Trade restrictions involving China are not new to the company. Sales growth in the country has been decelerating for years. This is because past restrictions have shrunk the pool of Chinese customers it can sell to.

This shows that China was already a declining business for Synopsys, softening the blow of this new restriction. Another very important issue to address is the company’s planned acquisition of ANSYS (NASDAQ: ANSS).

ANSYS Deal Approval Gets a New Wrinkle

Synopsys first announced its deal to acquire ANSYS back in January 2024 for $35 billion. However, the company is still waiting for regulatory approval on the deal. Chinese regulators remain the only group that has yet to approve it. There has been some speculation that the deal could be approved sooner, as the company will no longer be doing business in China.

At the Bank of America Global Technology Conference 2025 on June 4, the company noted that some have implied the ANSYS deal could get done “this week.” However, this would seemingly require the company to decide it no longer needs approval from China.

Synopsys pushed back on the idea that it would consider this. China-U.S. trade negotiations could progress in a way that restores Synopsys’s ability to sell in China. Moving forward with the acquisition without China’s approval could greatly damage its chances of reentering the Chinese market.

So, Synopsys is still seeking the necessary approval from China. It is anticipated that this approval would come in the first half of 2025. With the new trade restrictions, there is a possibility that China’s stance on the deal will harden. It could try to use it as a bargaining chip in trade negotiations.

SNPS: Near-Term Uncertainty, But Secular Trends Are Too Big to Ignore

Since Synopsys suspended its guidance, analysts at KeyCorp set a price target of $540 on the stock. This implies an 8% upside compared to the company’s June 11 closing price. This indicates a very moderate amount of upside potential, and the ANSYS deal provides a near-term headwind for Synopsys.

However, the company’s long-term prospects remain strong. The ANSYS deal will likely go through eventually, which will significantly aid the company’s competitive position.

Additionally, the company stands to benefit from a recovery in non-AI end markets that have experienced a decline for some time now.

More generally, the secular trend in developing more and more advanced chips across end markets sets the stock up forlong-term success.

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Alphabet Enters a Bull Market: Is It Time to Buy?

Written by Ryan Hasson

Shares of Alphabet (NASDAQ: GOOGL) are officially back in bull market territory, having surged more than 25% off their 52-week low and reclaimed the key 200-day simple moving average (SMA). While geopolitical tensions, such as Israel’s recent strike on Iran and escalating fears of a broader conflict, have weighed on markets this morning, with GOOGL down around 2% in pre-market trading at the time of writing, the bigger picture suggests the stock may be staging a durable turnaround.

Despite broader market weakness, Alphabet has been a clear outperformer. Coming into Friday, GOOGL was up nearly 10% on the month, handily outpacing the Invesco QQQ Trust (NASDAQ: QQQ) and the tech-focused SPDR Technology ETF (NYSEARCA: XLK), which were each up just over 4% in the same period.

With momentum building, is now the time for investors to take a serious look at Alphabet?

Morgan Stanley Sees Continued Upside and Leadership

On June 11, Morgan Stanley reiterated its Overweight rating and $185 price target for Alphabet, citing the company’s steady leadership in AI and a potential growth catalyst from its reported partnership with OpenAI through Google Cloud. Analysts believe that this collaboration could further enhance Google Cloud’s competitiveness in the enterprise space and drive substantial revenue growth in the expanding cloud market.

Morgan Stanley isn’t alone in their bullish assessment of the company. In total, GOOGL has a consensus rating of Moderate Buy based on 40 analyst ratings. Impressively, the consensus price target of $199.75 implies a potential 13.69% upsidefor the stock.

Alphabet Remains a Leader, But Some Headwinds Persist

Alphabet continues to assert its dominance across the digital landscape, even as artificial intelligence disrupts traditional search and advertising models. At the recent Google I/O 2025 conference, the company showcased its latest Gemini AI models, reaffirming its commitment to staying a leading player in the AI revolution.

JPMorgan reaffirmed its Overweight rating and $195 price target following the event, highlighting Alphabet’s AI innovations and growing monetization capabilities.

Google Search remains the undisputed leader, holding the lion’s share of the U.S. market. Despite the emergence of new AI-powered search tools, Google’s vast infrastructure and integration across the Android ecosystem and Chrome browser keep it deeply embedded in users’ lives. Its AI Overviews feature now reaches more than 1.5 billion users across 140 countries.

It is monetized similarly to traditional search, proof that Alphabet is scaling AI profitably, not just experimenting with it.

Beyond search, the company’s diversified portfolio is thriving. YouTube generated $10.47 billion in ad revenue during the last quarter, driven by robust user engagement and increasing subscriptions. Google Cloud continues gaining traction, particularly among enterprises adopting its AI-powered tools.

Meanwhile, Waymo is expanding its autonomous driving presence to over 10 U.S. cities, offering long-term upside as self-driving technology continues to mature.

Still, Alphabet faces meaningful headwinds. Its search dominance could come under pressure if Apple opts to replace Google as the default engine on Safari and Siri, potentially favoring AI alternatives like Perplexity or ChatGPT. Amazon and Meta also continue to chip away at ad budgets, and emerging AI-native platforms threaten to bypass traditional search entirely.

With ongoing antitrust scrutiny and tightening global privacy regulations, it’s clear that Alphabet must continue to innovate aggressively to maintain its leadership position.

Technical Setup Points to an Attractive Entry

From a technical perspective, GOOGL has reclaimed all major moving averages, suggesting a strengthening uptrend. The 200-day Simple Moving Average (SMA), currently near $171, now serves as a potential support level. A pullback to this area, which finds support and forms a higher low, could offer a compelling entry point for long-term investors.

Valuation-wise, GOOGL remains attractively priced.

The stock’s 10-year average P/E ratio is near 28, yet it currently trades at a P/E of 19.5 and 17.3 times its forward earnings. For investors who believe Alphabet will continue to grow its revenues and profits and even outperform expectations, the stock still appears to offer considerable value.

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