Breakfast News: Rocket Lab Earnings Fail to Launch
August 11, 2026
| Monday's Markets |
|---|
| S&P 500 7,753 (-0.06%) |
| Nasdaq 26,605 (-0.32%) |
| Dow 53,976 (-0.11%) |
| Bitcoin $63,981 (-1.79%) |
1. Rocket Lab: Up on Paper, Down 7%
Source: Image created by Jester AI.
Rocket Lab (RKLB +1.60%) just delivered its strongest quarter on record, but the stock fell around 7% in pre-market trading. Despite beating on revenue, the adjusted loss of $0.08 per share missed the expected loss of $0.06, a 33% earnings miss that overshadowed the top-line strength. Non-GAAP free cash flow burned $110.1 million in the second quarter, up from $77.4 million burned in the first. The business is growing, but it's still spending faster than it's collecting.
- CEO Peter Beck said "Q2 was another fantastic quarter": Beck isn't wrong that Q2 was strong – the record backlog is real. But investors zeroed in on the $0.02 miss and the wider cash burn, both of which say the business hasn't cracked how to grow without spending even more to do it. That's the operating-leverage question this stock still has to answer.
- Third-quarter guidance projects an adjusted EBITDA loss despite $250 million to $265 million in revenue: Long-term holders should watch free cash flow and share count over the next two or three quarters, not this one pre-market swing, for a stock both Team Hidden Gems and Team Rule Breakers still recommend.
2. BridgeBio Stalls, While Hims and On Fall Despite Good Quarters
- Hims & Hers Health (HIMS +0.26%) fell about 7% this morning even though revenue climbed 38% to $753.2 million, beating estimates. The company swung to a $127.9 million second-quarter loss, versus a year-ago profit and far worse than analysts expected, because cost of revenue more than doubled and crushed gross margin. Subscribers still grew 19%, and revenue per subscriber rose 21%, so the growth story is intact. The market just cared more about the shrinking margin.
- On Holding (ONON +2.09%) fell more than 12% in early trading despite a strong quarter. Wholesale sales, its sales to other retailers, grew just 4.8%, and revenue in the Americas, its largest market, rose only 4.5%. Full-year guidance for "low-20%" constant-currency growth implies a slowdown from the first half's 24% pace, and shares that had run up on hopes of faster growth fell double digits on the news.
- BridgeBio Pharma (BBIO -0.08%) was little changed after earnings revealed it more than doubled second-quarter revenue to $243.7 million, powered by its heart-disease drug Attruby. The operating loss for the Rule Breakers recommendation narrowed 20% to $107.1 million, and management now expects breakeven by 2027. A $1 billion preferred-equity raise that closed July 1 pushed cash to roughly $1.7 billion, funding three pipeline launches heading toward FDA decisions.
3. Who Lists First Sets the AI Price
OpenAI let current and former employees cash out $7 billion of stock Monday at an $852 billion valuation – the third such sale in two years, with still no IPO date set. The company confidentially filed with the SEC in June but hasn't set a timeline. Rival Anthropic, valued at $965 billion, is moving faster: it's meeting with investors ahead of a targeted September or October debut that some expect could become the largest IPO ever.
- Whichever company lists first sets the reference price for the sector: Both will lean on growth and capability to justify sky-high valuations. The same numbers-versus-narrative test we apply to earnings will apply here – revenue growth is real for both, but so is the cash they're burning to get it.
- Treat pre-IPO investor meetings as messaging, not evidence: Don't form a valuation view from positioning alone. Anthropic's executives still have to answer investor questions about cheaper Chinese AI rivals and friction with the Trump administration before any IPO happens.
4. CrowdStrike and Palo Alto Jump 5% as AI Threats Grow
AI agents have rewritten cybersecurity's threat landscape, and last week's Black Hat conference in Las Vegas made that impossible to ignore. Cybersecurity stocks rallied Monday: CrowdStrike (CRWD -1.01%) and Palo Alto Networks (PANW -2.32%) jumped more than 5% to fresh highs. CrowdStrike is beating the S&P 500 by 127% since the Hidden Gems recommendation from November 2024.
- "Yes, I think they're going to have to move fast, but CrowdStrike has AI in its DNA": Fool contributing analyst Danny Vena flagged the same threat last week, but said CrowdStrike and Palo Alto "have long had AI baked into their cybersecurity, and I think that gives them an edge against some of the legacy non-AI cybersecurity players."
- The uncomfortable flip side: The same AI agents fueling this rally are also arming the attackers. Palo Alto's identity platform and data-security products are positioned to capture spending as more AI agents multiply the number of identities to secure, while CrowdStrike's endpoint business rides the AI-driven modernization cycle.
5. The Airbnb Experience
It takes a special company to win the sustained approval of both Team Hidden Gems and Team Rule Breakers. Airbnb (ABNB +1.51%) has done so. We've recommended the stock over 70 times since 2021, at prices as high as $204 and as low as $87. Our average cost basis across all ABNB recs in Fooldom is $135.51. The stock advanced to $184 this week. That makes nearly all of our positions profitable, though many aren't beating the market. We think that could well change, after arguably its strongest quarterly earnings report in years.
- AI flipped the switch: Airbnb reaccelerated growth last quarter as bookings rose 10% and first-time bookers hit their highest rate in four years. AI powered much of the lift, clearing nearly 45% of support issues and shipping new features faster. (AI monetization – yep.)
- Cash for days: No rival in travel throws off cash like Airbnb. It converts nearly 37% of revenue to free cash flow. That results in more than $9.5 billion sitting in net cash and investments on its balance sheet. The company has cash enough to aggressively fund investments in AI and share buybacks.
Team Hidden Gems has a 5-year price prediction of $348.51.
Team Rule Breakers has a 5-year price prediction of $322.42 (averaging its base and bull cases).
Airbnb is priced at $184 today. If shares get to our targets, we'll have a very solid market beater across many, many investments.
6. Your Take
What's a stock in your portfolio that unites the growth crowd and the value crowd?
Discuss with friends and family, or become a member to hear what your fellow Fools are saying!
