Q2 Holdings QTWO shares soared 8.8% in the last trading session to close at $47.91. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 2.4% loss over the past four weeks.
The optimism surrounding the stock can be attributed to the increased demand for Q2’s digital banking platform and its leap in the AI space with Q2 Assistant, which embeds specialized AI agents across banking workflows.
This provider of online banking software is expected to post quarterly earnings of $0.67 per share in its upcoming report, which represents a year-over-year change of +34%. Revenues are expected to be $217.02 million, up 11.2% from the year-ago quarter.
Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.
For Q2 Holdings, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on QTWO going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Q2 Holdings is a member of the Zacks Internet - Software industry. One other stock in the same industry, Arlo Technologies ARLO, finished the last trading session 1.3% higher at $12.53. ARLO has returned -6.8% over the past month.
Arlo Technologies' consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.19. Compared to the company's year-ago EPS, this represents a change of +11.8%. Arlo Technologies currently boasts a Zacks Rank of #3 (Hold).
Beyond Nvidia: AI's Second Wave Is Here
The AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.
See Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Q2 Holdings, Inc. (QTWO): Free Stock Analysis Report
Arlo Technologies, Inc. (ARLO): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).