Peloton Interactive, Inc.

Key Points
Quantum computing stocks have been on a tear this year, despite the technology's nascent scale and still speculative nature.
Unlike the broader artificial intelligence (AI) theme, many popular quantum computing stocks are small companies with limited traction.
While it can be tempting to follow the momentum, several quantum computing stocks boast valuation multiples that echo those seen during prior stock market bubbles.
This year has been tough for investors, particularly those who flock toward growth stocks. Just about every major industry has been impacted in some form or fashion by President Donald Trump's new tariff policies.
While the broader implications of these import taxes are still unfolding, one sector that has faced abnormally large headwinds is technology. For the first time in nearly three years, investing in the artificial intelligence (AI) market hasn't necessarily resulted in outsized gains.
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Nevertheless, one pocket of the AI realm that has managed to circumvent the panic-selling this year is quantum computing. As of this writing (July 17), the Defiance Quantum ETF has gained 17% so far this year -- roughly double the returns seen in the S&P 500 and Nasdaq Composite.
With quantum computing stocks trouncing the broader market, now may be an appropriate time to assess valuations in the sector and compare them to prior periods of heightened enthusiasm.
What is a stock market bubble, and what are some examples?
One of the most basic mistakes investors make is assessing a company's valuation based on its stock price. In other words, if the stock price is low, an investor might mistakenly view the company as "cheap" (and vice versa).
Smart investors understand that there are far more parameters than the share price that help determine a company's valuation. Underlying financial metrics, such as revenue, gross margins, profitability, free cash flow, cash, and debt, should all play a factor in assessing the health of a business.
From there, more sophisticated analysis requires investors to benchmark these figures and their growth rates against a set of peers to get a better sense of how the business in question compares to the broader competitive landscape.
Many investors do not take the time to perform the due diligence exercise above and instead choose to follow broader momentum. Unfortunately, this can lead to abnormally inflated stock prices -- those that are incongruent with the underlying fundamentals of the business.
Generally speaking, reality begins to set in and these companies are unable to sustain their overstretched valuations, eventually leading to harsh, dramatic sell-offs. This phenomenon is known as a stock market bubble.
In the charts below, I've illustrated some valuation trends across two notable stock market bubbles.
The chart above illustrates the price-to-sales (P/S) ratios for a number of high-flying internet stocks during the dot-com bubble of the late 1990s. As the trends above make clear, each of the companies in the peer set above trades at much more normalized valuation multiples today when compared to their peaks during the internet boom.
Investors witnessed a similar theme in overstretched valuations during the peak days of the COVID-19 pandemic. Companies such as Zoom Communications, Wayfair, and Peloton witnessed abnormal demand for their respective product offerings as remote work became the norm.
As the trends seen above demonstrate, however, these growth tailwinds were not permanent. Today, none of these COVID stocks are seen as compelling growth opportunities, and their cratering valuations are a sobering reminder of the aftermath of bubbles bursting.
How do quantum computing stocks compare to the valuations above?
Over the last year, IonQ (NYSE: IONQ), Rigetti Computing (NASDAQ: RGTI), D-Wave Quantum (NYSE: QBTS), and Quantum Computing (NASDAQ: QUBT) have emerged as popular names fueling the quantum computing movement.
With a P/S multiple of over 5,700, the tiny Quantum Computing business is the clear outlier in the quantum computing cohort illustrated above. Even so, Rigetti, IonQ, and D-Wave each boast P/S ratios that are either considerably higher or in line with the darlings of the dot-com and COVID bubbles.
Are we in a quantum computing stock bubble?
The quantum computing stocks referenced above are highly speculative -- arguably even more so than the highfliers during the internet era. Unlike then, today's technology behemoths, such as Amazon, Microsoft, eBay, and Cisco, have evolved into sophisticated platform businesses with diversified ecosystems.
This provides them with the scale and financial flexibility to explore emerging fields such as quantum computing. Smaller players, such as IonQ, Rigetti, D-Wave, and Quantum Computing, currently face intense competition from big tech -- something the dot-com businesses did not.
Given the valuation analyses explored above, many popular quantum computing stocks are clearly trading at abnormally high and historically unsustainable valuation levels. For these reasons, I think companies such as IonQ, Rigetti, D-Wave, and Quantum Computing have entered bubble territory.
With that said, many big tech companies in the "Magnificent Seven" are exploring quantum applications as well. Many of these companies trade for much more reasonable valuations. While I am not convinced the broader quantum computing opportunity is necessarily in a bubble, I believe investors need to be cautious and thoughtful when selecting which quantum computing stocks to invest in.
And the best choices will rarely be high-flying specialists with big dreams and small revenue streams.
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Adam Spatacco has positions in Amazon and Microsoft. The Motley Fool has positions in and recommends Amazon, Cisco Systems, Microsoft, Peloton Interactive, VeriSign, Zoom Communications, and eBay. The Motley Fool recommends Wayfair and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Are We in a Quantum Computing Bubble?

Key Points
The connected fitness company pulled back as consumer sentiment fell.
Revenue continued to decline at Peloton, though it made progress in cost cutting.
A turnaround depends on returning the top line to growth.
Peloton Interactive's (NASDAQ: PTON) woes have continued so far this year as the connected fitness company is still struggling to grow and turn a profit as it's been unable to overcome its post-pandemic collapse.
While some investors continue to hope for a turnaround, there was little sign of one in its two quarterly reports through the first half of the year. The stock also fell in June when the Senate blocked spending from Health Savings Accounts (HSAs) on gym memberships and personal fitness activities.
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Through the first half of the year, the stock was down 20% according to data from S&P Global Market Intelligence.
As you can see from the chart below, the stock fell through February and March, and only managed a modest recovery in the second quarter even though the broad market soared.
Peloton is still moving backwards
After announcing last year that Barry McCarthy would step down as CEO, the company began the year with a new chief executive, Peter Stern, who is a co-founder of Apple Fitness.
Peloton shares were up briefly in February as investors bid the stock higher after its Q2 earnings report on Feb. 6 even though the business continued to struggle.
Revenue fell 9% to $673.9 million, and subscribers and members both fell. The company also managed to flip a $81.7 million adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) loss from the quarter the year before to a profit of $58.4 million.
Later in February and into March, the stock began to fall even as there was no company-specific news out. Instead, the stock seemed to fall in response to weakening consumer sentiment and the broader decline in the stock market. As a seller of high-priced exercise equipment, Peloton is clearly sensitive to consumer spending. In April, the company announced a leadership transition, bringing in Charles Kirol as COO.
In its fiscal Q3 earnings report, revenue fell again, declining 13% to $624 million, though its cost-cutting efforts paid off as it continued to narrow its generally accepted accounting principles (GAAP) net loss, which improved from $167.3 million to $47.7 million.
On June 17, the stock fell 12% as the Senate removed a provision from a bill to allow health savings accounts (HSAs) to be used for things like Peloton equipment.
What's next for Peloton
Peloton is making progress on the bottom line thanks to its cost-cutting strategy, and it did raise its revenue guidance in its most recent report.
However, it's hard to say that its turnaround strategy is working until the company is able to demonstrate steady growth in both revenue and subscribers. It could take a while for the company to get back there.
Should you invest $1,000 in Peloton Interactive right now?
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Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Peloton Interactive. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Why Peloton Stock Lost 20% in the First Half of the Year

Motley Fool Co-Founder David Gardner Reviews Stock Picks

Looking at options trading activity among components of the Russell 3000 index, there is noteworthy activity today in Peloton Interactive Inc (Symbol: PTON), where a total volume of 64,765 contracts has been traded thus far today, a contract volume which is representative of approximately 6.5 million underlying shares (given that every 1 contract represents 100 underlying shares). That number works out to 44.7% of PTON's average daily trading volume over the past month, of 14.5 million shares. Especially high volume was seen for the $7.50 strike call option expiring July 18, 2025, with 17,383 contracts trading so far today, representing approximately 1.7 million underlying shares of PTON. Below is a chart showing PTON's trailing twelve month trading history, with the $7.50 strike highlighted in orange:
Deckers Outdoor Corp. (Symbol: DECK) saw options trading volume of 13,057 contracts, representing approximately 1.3 million underlying shares or approximately 44.2% of DECK's average daily trading volume over the past month, of 3.0 million shares. Especially high volume was seen for the $110 strike call option expiring July 18, 2025, with 1,551 contracts trading so far today, representing approximately 155,100 underlying shares of DECK. Below is a chart showing DECK's trailing twelve month trading history, with the $110 strike highlighted in orange:
And United Parcel Service Inc (Symbol: UPS) options are showing a volume of 20,650 contracts thus far today. That number of contracts represents approximately 2.1 million underlying shares, working out to a sizeable 42.6% of UPS's average daily trading volume over the past month, of 4.9 million shares. Especially high volume was seen for the $105 strike call option expiring January 16, 2026, with 2,682 contracts trading so far today, representing approximately 268,200 underlying shares of UPS. Below is a chart showing UPS's trailing twelve month trading history, with the $105 strike highlighted in orange:
For the various different available expirations for PTON options, DECK options, or UPS options, visit StockOptionsChannel.com.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Noteworthy Friday Option Activity: PTON, DECK, UPS

Top Quantitative Traits for Rule Breaker Stocks

Looking at options trading activity among components of the Russell 3000 index, there is noteworthy activity today in Oscar Health Inc (Symbol: OSCR), where a total volume of 92,745 contracts has been traded thus far today, a contract volume which is representative of approximately 9.3 million underlying shares (given that every 1 contract represents 100 underlying shares). That number works out to 82% of OSCR's average daily trading volume over the past month, of 11.3 million shares. Especially high volume was seen for the $16 strike call option expiring July 18, 2025, with 12,385 contracts trading so far today, representing approximately 1.2 million underlying shares of OSCR. Below is a chart showing OSCR's trailing twelve month trading history, with the $16 strike highlighted in orange:
Peloton Interactive Inc (Symbol: PTON) saw options trading volume of 124,433 contracts, representing approximately 12.4 million underlying shares or approximately 80.8% of PTON's average daily trading volume over the past month, of 15.4 million shares. Particularly high volume was seen for the $7 strike call option expiring July 18, 2025, with 74,464 contracts trading so far today, representing approximately 7.4 million underlying shares of PTON. Below is a chart showing PTON's trailing twelve month trading history, with the $7 strike highlighted in orange:
And Marvell Technology Inc (Symbol: MRVL) options are showing a volume of 154,646 contracts thus far today. That number of contracts represents approximately 15.5 million underlying shares, working out to a sizeable 71.6% of MRVL's average daily trading volume over the past month, of 21.6 million shares. Particularly high volume was seen for the $72 strike call option expiring June 20, 2025, with 21,907 contracts trading so far today, representing approximately 2.2 million underlying shares of MRVL. Below is a chart showing MRVL's trailing twelve month trading history, with the $72 strike highlighted in orange:
For the various different available expirations for OSCR options, PTON options, or MRVL options, visit StockOptionsChannel.com.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Noteworthy Tuesday Option Activity: OSCR, PTON, MRVL

Nike's Turnaround Story

Shiba Inu (CRYPTO: SHIB) could not have performed better for investors a few years ago. From the start of 2021 to its all-time high in late October that year, this digital asset absolutely skyrocketed. There are surely some very lucky speculators who amassed life-changing wealth.
However, it's been a different story since then. While the overall crypto market has held up well, despite the volatility, Shiba Inu has a lot of work to do to catch up to its former glory.
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As of May 20, this meme token trades at $0.00001428, which is 84% below its peak from about three and a half years ago. Is it time to buy the dip with Shiba Inu? I think investors should look at both sides of the argument to gain a more thorough understanding.
Hoping for a quick profit
As of this writing, Shiba Inu carries a market cap of $8.4 billion. This makes it the 16th largest cryptocurrency on Earth. This is a higher value than companies like Etsy and Peloton.
As a result, it's hard to argue that Shiba Inu doesn't possess a strong community of supporters. These supporters, known as the "Shib Army," help to drive interest in the token online. Speculators understand that the community can lead to various hype cycles. And if the timing is correct, there's a chance to achieve huge profits in a short period of time.
Shiba Inu can be viewed as a "Dogecoin killer." That's because it's built to be compatible with the Ethereum network. This means that Shiba Inu has greater functionality than its dog-themed predecessor. Tokens can be used in decentralized exchanges, to trade non-fungible tokens, or within decentralized finance protocols. In theory, this raises utility.
What's more, Shiba Inu's developers are trying to increase adoption with various features. Shibarium, a layer-2 scaling solution, was introduced to speed up transactions and lower costs. A dedicated metaverse was also launched in December last year that allows users to interact in a virtual world. This might draw some excitement toward Shiba Inu.
Adding unnecessary risk to your portfolio
According to venture firm Electric Capital, Shiba Inu isn't even on the list of top 100 cryptocurrencies when it comes to the number of developers actively working on it. This doesn't bode well for its future, especially if you believe, like I do, that a cryptocurrency's ultimate viability comes down to how much real-world utility it can introduce. This puts Shiba Inu at a major disadvantage.
The tokenomics also leave much to be desired. There are currently 589 trillion Shiba Inu tokens in circulation. That intentionally high supply base is the opposite setup of the scarcity Bitcoin possesses, for instance. This makes it all the more difficult for Shiba Inu's price to steadily rise over time.
There is a coin-burning mechanism in place to reduce supply. On May 19, though, only 49 million coins were burned. That's not going to put a meaningful dent in the supply anytime soon, as it would take more than 16,000 years to burn half the outstanding supply.
The fact that anyone can create a new token out of thin air poses a key risk for Shiba Inu, which is competition. The cryptocurrency industry remains the newest asset class out there. Consequently, it's still characterized by unhealthy amounts of speculation among market participants. There's no shortage of tokens to bet on in the hopes of getting rich quick. This increases the chances that people will move away from Shiba Inu one day onto the newly released shiny token.
For long-term investors who want to own high-quality assets, there's really no reason to own Shiba Inu. The bear case for the meme token is much more compelling than the bullish argument. Even though the cryptocurrency is trading well off its peak, investors should avoid Shiba Inu.
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Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin, Ethereum, Etsy, and Peloton Interactive. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Shiba Inu Is Down 84%. Should You Buy the Dip?

In trading on Monday, shares of Peloton Interactive Inc (Symbol: PTON) crossed above their 200 day moving average of $6.51, changing hands as high as $6.70 per share. Peloton Interactive Inc shares are currently trading up about 3.5% on the day. The chart below shows the one year performance of PTON shares, versus its 200 day moving average:
Looking at the chart above, PTON's low point in its 52 week range is $2.70 per share, with $10.895 as the 52 week high point — that compares with a last trade of $6.44.
Click here to find out which 9 other stocks recently crossed above their 200 day moving average »
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

PTON Crosses Above Key Moving Average Level

Peloton Interactive, Inc. PTON is likely to benefit from product innovation, deepening consumer engagement and strategic partnerships. Also, the focus on unit economics and right-sizing of costs bodes well. However, an uncertain macroeconomic environment is a concern.
Growth Drivers for PTON Stock
Peloton is concentrating on innovation, broader market reach, enhanced member engagement and disciplined cost management to drive growth. The company highlighted significant growth in non-cycling disciplines. In the second quarter of fiscal 2025, over 2 million members engaged in Strength Training, Bootcamp, Pilate, or Yoga, accounting for 735 million workout minutes — about 75% of cycling workouts. Members participating in multiple disciplines showed a 60% lower churn rate, underlining the business benefit of fitness variety.
The company made notable progress with its treadmill products, driven by targeted marketing that boosted both sales and subscription attachment rates. Peloton also launched a 10K training program, adding to its full suite of race-distance offerings. Over 300,000 members have trained for a running event using Peloton programs. Features like “Pace Targets,” offering personalized intensity levels, are enhancing user outcomes and adoption.
Peloton is broadening its reach through app innovation and retail partnerships. The Strength+ app, launched in December, attracted over 220,000 monthly active users in the fiscal second quarter, mostly existing All-Access Members. Retail partnerships are also paying off, with Costco emerging as the top-performing third-party partner for Bike+ sales. International hardware sales and connected fitness subscriptions continue to gain traction.
Peloton made notable strides to enhance hardware unit economics through strategic pricing adjustments. The company increased the price of its rowing machine in North America and raised prices for the Bike and Bike+ in international markets. During the holiday season, Peloton further improved unit margins by limiting the duration of promotional discounts and aligning its promotional strategy more closely with product margin profiles. These initiatives reflect a more disciplined pricing approach.
Peloton’s Concerns
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Shares of Peloton have declined 35.4% so far this year compared with the industry’s 6% fall. The downside can be attributed to an uncertain macroeconomic environment.
Peloton recently felt the impact of inflationary pressures on its operational and financial performance, with rising costs across supply chain logistics, materials and labor. Although the exact impact of inflation is difficult to quantify, the company acknowledges that these cost pressures could persist. If Peloton is unable to fully offset elevated expenses through pricing adjustments, it may face challenges in sustaining its current gross margin and managing operating expenses as a percentage of net revenues. Furthermore, the company remains vulnerable to inflation-related pressures faced by its suppliers, which could disrupt the availability or affordability of key components.
PTON’s Zacks Rank & Stocks to Consider
Peloton currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the Zacks Consumer Discretionary sector are Life Time Group Holdings, Inc. LTH, American Outdoor Brands, Inc. AOUT and Ralph Lauren Corporation RL.
Life Time Group presently sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The company delivered a trailing four-quarter earnings surprise of 21.6%, on average. The stock has surged 126.4% in the past year. The consensus estimate for Life Time Group’s 2025 sales and earnings per share (EPS) implies growth of 12.9% and 37.9%, respectively, from the year-ago levels.
American Outdoor carries a Zacks Rank #2 (Buy) at present. The company delivered a trailing four-quarter earnings surprise of 79.6%, on average. The stock has gained 25% in the past year.
The Zacks Consensus Estimate for American Outdoor’s fiscal 2025 sales and EPS indicates growth of 3.7% and 93.8%, respectively, from the year-ago levels.
Ralph Lauren presently carries a Zacks Rank of 2. The company delivered a trailing four-quarter earnings surprise of 6.5%, on average. The stock has gained 26.9% in the past year.
The consensus estimate for Ralph Lauren’s fiscal 2025 sales and EPS implies growth of 5.8% and 16.5%, respectively, from the year-ago levels.
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This article originally published on Zacks Investment Research (zacks.com).
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.