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Market Data Table

Breakfast News: Intuit's Guidance Gets Taxed

August 26, 2026

Tuesday's Markets
S&P 500 7,677 (+0.32%)
Nasdaq 26,151 (+0.66%)
Dow 53,577 (+0.30%)
Bitcoin $78,865 (+0.28%)

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1) Intuit's Guidance Cut Exposes a TurboTax Pricing Problem

Chart tracking Intuit's revenue over the past five years, showing a pattern of first-quarter jumps followed by plunging second quarters with slight rises into the third and fourth quarters, as well as slight rising overall. Revenue sits at $4.3 billion in the second quarter of 2026 after falling from its first-quarter rise of nearly $9 billion.

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Intuit (NASDAQ: INTU) topped Wall Street's fourth-quarter targets, posting revenue of $4.35 billion and non-GAAP earnings of $4.03 a share. Yet shares dropped 10% in after-hours trading. The culprit: fiscal 2027 revenue guidance of $23.28 billion to $23.51 billion. That trails analyst hopes near $23.72 billion and marks a sharp comedown from 2026's 14% growth pace. For long-term investors, this is a reminder: Markets price trajectory, not just trailing results. A business growing double digits today can still spook Wall Street if tomorrow's curve bends downward. TurboTax sits at the center of that bend. CEO Sasan Goodarzi admitted that price has become customers' top reason for leaving. Total U.S. units slipped 2% last year.

A pricing reset with a payoff horizon: Management is rolling out a cheaper, simpler, entry-level TurboTax to win back lapsed filers. That trades near-term revenue for a bigger long-term customer base.
The quiet growth engines: QuickBooks Online Accounting and Credit Karma grew 23% and 20%, respectively, in fiscal 2026. That's a reminder that Intuit's story runs well beyond tax season. The real test comes next: If the cheaper tier slows defections, this guidance cut is a reset, not a trend.

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2) CAVA Shrugs Off Food Scares as Sales Rebound

A summer of food-safety scares rattled fast-casual dining, and CAVA (NYSE:CAVA) wasn't spared. A cyclospora outbreak tied to lettuce and a salmonella scare linked to jalapeños dented traffic at fast-casual chains. Chipotle (NYSE:CMG) and Sweetgreen (NYSE:SG) both felt it, too. CAVA's same-store sales dipped near the end of its quarter ended July 12. But CFO Tricia Tolivar told The Wall Street Journal that growth rebounded to mid-single digits by early August as fears eased. The salmonella scare, still under investigation, hasn't dented sales so far. CAVA says it never sourced from the implicated suppliers. And it leans on a three-expert food-safety advisory council to vet decisions like adding allergen-prone seafood to the menu. CAVA is 25% ahead of the S&P 500 since being recommended in Rule Breakers in October 2023.

Grains beat out greens, briefly: When customers grew wary of leafy vegetables, CAVA's varied menu gave them an out. They shifted to grain bowls and pitas instead of skipping the chain.
Quiet reassurance over loud marketing: Rather than run a defensive ad campaign, CAVA equipped frontline staff with supply chain facts. The logic: Word-of-mouth trust beats a press release.

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3) Foot Locker Drags Dick's Into Its Worst Day Ever

Dick's Sporting Goods (NYSE:DKS) just had its worst trading day on record. Shares plunged more than 30% Tuesday after Q2 earnings and same-store sales missed estimates. It dragged Nike (NYSE:NKE) down 3.1% and other footwear names with it. Deckers (NYSE:DECK), recommended in Hidden Gems, closed 3.6% down, while On Holding (NYSE:ONON) -- a Team Rule Breakers rec -- dipped 2.3%. The culprit is Foot Locker, the chain Dick's bought earlier this year and that now increasingly looks like dead weight. Rivals are also using tariff refunds to slash prices, a dynamic that also dented Walmart (NASDAQ:WMT). Dick's suddenly looks like a company fighting a two-front war.

"Nike inadvertently created a retail shelf vacuum": Suggesting Nike Direct has eroded the brand's competitive moat, Fool contributing analyst Lou Whiteman noted in May that "This space was quickly filled by rivals, including On Holding and Deckers Outdoor."
Sneakers as bellwether: Footwear demand tends to track consumer health broadly. It's worth checking upcoming reads from other consumer-discretionary retailers to see if this is company-specific or a genuine macro signal before drawing conclusions about the sector.

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4) Synopsys, Salesforce, and Okta Test Their AI Payoff

We previewed CrowdStrike (NASDAQ:CRWD) and Veeva Systems (NYSE:VEEV) in Monday's Breakfast News. Today, we're covering three other Fool recommendations reporting after the bell. Each is being tested on whether its new AI products are turning into real revenue, not just road map slides.

Synopsys' (NASDAQ:SNPS) second-quarter revenue grew 42% year over year to $2.3 billion, boosted by the Ansys acquisition. Watch whether Q3 results meet guidance of $2.41 to $2.46 billion in revenue. Key areas to monitor: progress toward 50% of committed Ansys cost synergies by fiscal year-end, the ramp of Multiphysics Fusion technology, closing of the Processor IP Solutions divestiture, and customer adoption of paid agentic AI engineering tools.
Salesforce's (NYSE:CRM) first-quarter revenue grew 13% year over year to $11.1 billion, just below analyst expectations. Management guides for Q2 revenue of between $11.27 billion and $11.35 billion. Watch Agentforce monetization and progress on the Headless 360 platform strategy.
Okta (NASDAQ:OKTA) is expected to post Q2 revenue of roughly $793 million, reflecting management's guidance for 9% growth. Investors will watch for early revenue contributions from Okta's new AI agent governance products and for updates on the $680 million remaining in its buyback program. Net retention held at 107% last quarter.

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5) Nvidia Kills Its Darling

Team Hidden Gems

Nvidia (NASDAQ:NVDA) reports Q2 2027 earnings results after market close today!

The company makes its own best products obsolete on purpose. It ships a new chip architecture almost every year. Each replacement is so good that people fight to buy it at a higher price. Our Rule Breakers team first recommended Nvidia back in April 2005 to Stock Advisor members (and never sold). A $10,000 stake invested then, left untouched, is worth about $13 million today. In Hidden Gems, over the years, we have recommended NVDA at prices ranging from $5 to $94 to $219 (three weeks ago). What are we looking for in this report?

Don't let the old chip stall while the new one ramps up: Nvidia's top AI chip today is Blackwell Ultra, with Vera Rubin coming next. There's a risk that customers will pause on Blackwell Ultra to wait for Rubin, leaving a sales gap. Investors want Blackwell Ultra to sell out anyway and Rubin to ship on time. In March, CEO Jensen Huang said he expects the two chips to bring in a combined $1 trillion in revenue through 2027. Noted!
Rising memory costs are squeezing profits: Nvidia expects gross margins of 75%. But the specialized memory inside its chips has gotten pricier on tight supply. And new chip development costs money up front before it pays off. If Nvidia can reach those 75% gross margins, that'll signal more winning operating efficiency and continued pricing power.

Team Hidden Gems has a five-year price prediction of $363.04 for Nvidia, a 71% increase from today's price of $212.

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6) Your Take

Name a company in your portfolio that wins by disrupting itself before someone else does. Which product or service did it replace?

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

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