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Market Data Table

Breakfast News: Wall Street Redraws Figma Too Fast

August 6, 2026

Wednesday's Markets
S&P 500 7,724 (-0.17%)
Nasdaq 26,363 (-0.83%)
Dow 54,349 (+0.49%)
Bitcoin $64,851 (+0.93%)

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1) Shopify Delivers Again

Team Rule Breakers

When we recommended Shopify (NASDAQ:SHOP) in Rule Breakers in 2016, the stock violated Trait #3 of David Gardner's Six Traits of a Rule Breaker -- stellar past price appreciation. In the month before, the stock had been cut in half to $2.10 a share (split-adjusted). But the best principles leave room for judgment. Shopify is also an 80-time Team Hidden Gems recommendation, working from a different investing framework. Both teams are sitting on massive multibagger returns for members. Shares closed up roughly 17% yesterday, to $144 per share, a spiffy-pop (David's term for a single-day share-price jump greater than your cost basis).

This business keeps compounding. Q2 revenue grew 33.7% year over year, operating profit jumped 68%, and free cash flow rose 55%. Gross merchandise volume hit $115.6 billion, its second-best quarter ever.
It's moving upmarket. Monthly recurring revenue grew 19%, roughly double last year's pace. Shopify is landing larger, higher-value merchants. Management is guiding for free-cash-flow margins in the "high-teens to low-twenties" for Q3. The upmarket move should splash cash to the bottom line.

Shopify remains an active Buy across Rule Breakers and Hidden Gems services. In fact, we've never sold a share across all services, dating back a decade. Yesterday's spiffy-pop was great, but the upmarket shift suggests there's plenty of runway ahead.

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Chart showing Figma's gross profit margin over the past three years, hovering between 89% and 92% from the third quarter of 2023 through the second quarter of 2025, aside from a dip to 78% in Q2 2024. In Q3 2025, the gross profit margin falls to 69% and then rises to remain between 79% and 84% through the second quarter of 2026.

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2) Wall Street Won't Fund Figma's AI Dream on Faith

Figma (NYSE:FIG) costs nearly doubled, and the market treated the bill like a wound. The stock fell more than 15% pre-market after R&D more than doubled and total operating expenses hit $426.9 million, close to double a year ago. The fear spread: Salesforce (NYSE:CRM) slid more than 4% on the same worry about surging artificial intelligence (AI) spending.

"As code gets commoditized and value moves up the stack, the opportunity ahead of us has only grown": CEO Dylan Field is unbowed, framing rising AI consumption as the whole opportunity. The trouble is, the numbers haven't yet shown that spend turning into a durable moat, and investors won't fund the story on faith once expenses jump this fast.
"The after-hours selloff suggests Figma has suffered an impairment instead of recognizing that the company is making an investment": Fool analyst Tim Beyers took a more measured approach. His point: Figma's new Config products are still in beta, and it's choosing not to charge for AI credit usage on them yet. So, today's costs are running ahead of revenue that the company hasn't switched on. To own this Rule Breakers recommendation here, you have to believe that meter gets turned on.

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3) Grow Now, Pay Later: MercadoLibre's Risky Gambit

MercadoLibre (NASDAQ:MELI) just grew faster than it has in four years, and the stock fell about 4% for it. Net revenue and financial income rose 50% year over year. The catch is that margins shrank because the same spending driving that growth ate into profits.

"We believe investing boldly today is the right response to seize it (the opportunity in LatAm’s digital economy)": Management isn't apologizing. It's pouring money into free shipping, its credit-card push, and PIX payment discounts in Brazil to grab share while Latin America's digital economy is still up for grabs.
The whole question for this Rule Breakers recommendation: Fifty-percent growth is real, but it only pays off if today's spending becomes tomorrow's profit instead of a permanently thinner margin. Some investors clearly wanted more of that growth reaching the bottom line now. Own it if you believe management is funding a land-grab that pays off later. Watch whether margins stabilize as the spending scales; if they keep sliding while growth cools, the strategy stops looking bold and starts looking expensive.

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4) SaaS Earnings Split: One Winner, Two Warnings

HubSpot (NYSE:HUBS), down ~20%: Its guidance did the damage: Management projected about 14% revenue growth, a clear step down from the low-20s pace investors were used to. For this Rule Breakers and Hidden Gems recommendation, the real question is whether 14% to 15% is the new steady state or a sandbagged guide it raises later. One report can't answer that.
Paycom (NYSE:PAYC), up >14%: The clean win of the three. Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) margin hit 44.2% and beat estimates, so profit outpaced an already-solid revenue beat, and management lifted full-year guidance on both. A beat-and-raise is exactly what the market pays up for at this Hidden Gems rec.
Duolingo (NASDAQ:DUOL), down >10%: Revenue rose 18.3%, but bookings, the better read on current demand, grew just 8%, and that gap sank the stock. Worse, a one-time "Streak Revival" event in June revived 15.4 million lapsed learners, flattering user growth that may not repeat. For this Rule Breakers recommendation, demand looked softer than the revenue line implied.

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5) Nintendo Wins, Celsius Cools; All Eyes Turn to TTD

Nintendo (OTC:NTDOY) beat on revenue and profit this morning, even as Switch 2 hardware sales fell 34.4% year over year. Game sales and The Super Mario Galaxy Movie carried the quarter instead; the movie has cleared $1 billion globally, the second-highest-grossing film ever based on a video game. For this Team Rule Breakers recommendation, software and intellectual property (IP) are doing the heavy lifting.
Celsius (NASDAQ:CELH) reports before the market opens. The Stock Advisor rec by Team Hidden Gems delivered a blow-out quarter last time around, with a focus today on the split of growth between brands. After all, last quarter Alani Nu contributed almost half of total revenue, while the core Celsius brand grew a more modest 6% and Rockstar's own sales actually declined 13%.
The Trade Desk (NASDAQ:TTD) releases earnings after the closing bell, as it aims to move on from the higher operating expenses from last quarter. Revenue growth is expected to continue to slow. The core long-term question is whether the deceleration from a 20%+ revenue grower to a high-single-digit grower is a one-time reset as the company matures or the early signal of a structural shift. The stock is recommended by both Team Rule Breakers and Team Hidden Gems -- look out for earnings reaction from both in tomorrow's Breakfast News!

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6) Today's Take: When the Tech Story Takes Over

Finding a company or technology that ignites my imagination is exciting. But it can also be dangerous, too. When I'm overly excited about a particular investment, I do a few different things as a sanity check:

Take a break, because time away helps me gain clarity.
Talk to a friendly curmudgeon or pretend to be one while taking a fresh look at the company I'm excited about.
Do valuation work to understand the true drivers of a company's success and to make sure the company doesn't have to eat the world to meet market expectations.

– Alicia Alfiere, Team Rule Breakers

Catch how Fools resist a hot tech story

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7) Your Take

When a company you own ramps up spending on AI, what would you need to see before you'd trust it's paying off?

Debate with friends and family, or become a member to hear what your fellow Fools are saying!

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