Press Release: Avnet To Participate In The Nasdaq Investor Conference On December 9

What Happened?

A number of stocks jumped in the afternoon session after comments from a key Federal Reserve official hinted at a potential interest rate cut in December. 

John Williams, president of the Federal Reserve Bank of New York, signaled he was open to lowering the fed funds rate—the key interest rate that banks charge each other for overnight loans—to support the job market. Speaking at an event, Williams stated that he sees “room for a further adjustment” for interest rates, which immediately shifted market expectations. Following his remarks, the perceived likelihood of an interest rate cut at the Federal Reserve's December meeting flipped from unlikely to more likely than not. The prospect of lower borrowing costs sent a wave of optimism through the markets, leading to a rally in major indices like the S&P 500, Dow Jones Industrial Average, and the Nasdaq Composite.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.

Among others, the following stocks were impacted:

• Electronic Components & Manufacturing company Plexus jumped 4.3%. Is now the time to buy Plexus? Access our full analysis report here, it’s free for active Edge members.
• Hardware & Infrastructure company Dell jumped 4.9%. Is now the time to buy Dell? Access our full analysis report here, it’s free for active Edge members.
• IT Distribution & Solutions company Avnet jumped 4.3%. Is now the time to buy Avnet? Access our full analysis report here, it’s free for active Edge members.
• Hardware & Infrastructure company NetApp jumped 4.7%. Is now the time to buy NetApp? Access our full analysis report here, it’s free for active Edge members.
• IT Distribution & Solutions company ScanSource jumped 5%. Is now the time to buy ScanSource? Access our full analysis report here, it’s free for active Edge members.

Zooming In On ScanSource (SCSC)

ScanSource’s shares are not very volatile and have only had 6 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

The biggest move we wrote about over the last year was 3 months ago when the stock gained 12.6% on the news that the major indices rebounded, as Fed Chair Jerome Powell delivered dovish remarks at the much-awaited Jackson Hole symposium. Powell suggested that with inflation risks moderating and unemployment remaining low, the Federal Reserve might consider a shift in its monetary policy stance, including potential interest rate cuts. This outlook eased market concerns about prolonged high interest rates and their impact on economic growth. The prospect of lower borrowing costs bolstered investor confidence, particularly in sectors that have lagged, leading to a broad rally across the market.

ScanSource is down 16% since the beginning of the year, and at $39.52 per share, it is trading 25.6% below its 52-week high of $53.11 from December 2024. Investors who bought $1,000 worth of ScanSource’s shares 5 years ago would now be looking at an investment worth $1,561.

Avnet's third quarter was marked by revenue growth ahead of Wall Street expectations, with management attributing the performance to strong results in Asia and the Farnell business. CEO Phil Gallagher noted that both Asia and Farnell achieved double-digit year-over-year growth, while the Americas returned to year-on-year growth for the first time in recent quarters. Demand was particularly resilient in the transportation, compute, and communication sectors, and Gallagher highlighted that “semiconductor lead times and pricing continue to be stable for most technologies,” though memory and interconnect products saw some tightness tied to data center and AI demand.

Is now the time to buy AVT? Find out in our full research report (it’s free for active Edge members).

Avnet (AVT) Q3 CY2025 Highlights:

• Revenue: $5.90 billion vs analyst estimates of $5.73 billion (5.3% year-on-year growth, 3% beat)
• Adjusted EPS: $0.84 vs analyst estimates of $0.81 (4% beat)
• Adjusted EBITDA: $181.5 million vs analyst estimates of $171.6 million (3.1% margin, 5.7% beat)
• Revenue Guidance for Q4 CY2025 is $6 billion at the midpoint, above analyst estimates of $5.85 billion
• Adjusted EPS guidance for Q4 CY2025 is $0.95 at the midpoint, below analyst estimates of $1.02
• Operating Margin: 2.6%, in line with the same quarter last year
• Market Capitalization: $3.85 billion

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions From Avnet’s Q3 Earnings Call

• William Stein (Truist Securities) asked about Avnet’s exposure to AI and data center applications. CEO Philip Gallagher clarified that while hyperscaler business remains a small share (about 7% of Asia sales), downstream opportunities in power, storage, and edge computing are growing.

• Stein (Truist Securities) also pressed on inventory levels and expected trajectory. CFO Ken Jacobson said inventory days remain elevated due to targeted investments but should decline into the “80s” range over the coming quarters, with the quality of inventory described as strong.

• Joseph Quatrochi (Wells Fargo) inquired about EMEA demand and seasonality. Gallagher replied that Europe is stabilizing, with positive bookings and backlog growth, and modest sequential improvement is expected despite historical weakness in the region.

• Ruplu Bhattacharya (Bank of America) queried about margin outlooks for both core and Farnell businesses. Jacobson attributed limited margin expansion to regional sales mix and noted that Farnell’s margins are more dependent on product mix, with on-the-board components offering higher profitability.

• Melissa Fairbanks (Raymond James) asked about transportation sector trends and exposure to electric vehicles. Gallagher indicated transport growth was strongest in Asia and the Americas, with Asia having a higher mix of electric vehicle-related sales.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will be watching (1) whether Asia and the Americas sustain their sales momentum, (2) signs that margin pressures from regional and product mix begin to ease, and (3) progress on inventory management, especially reductions in inventory days. Developments in AI and data center demand, as well as the trajectory of price increases in memory and interconnect products, will also be closely monitored.

Avnet currently trades at $47.31, down from $50.56 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free for active Edge members).

Our Favorite Stocks Right Now

Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.

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Check out the companies making headlines yesterday:

Applied Digital : Digital infrastructure provider Applied Digital rose by 2.2% on Wednesday after Needham reiterated its Buy rating on the company's stock, maintaining a price target of $41.00. See our full article here.

Is now the time to buy Applied Digital? Access our full analysis report here.

Avnet : Electronic components distributor Avnet (NASDAQGS:AVT) fell by 0.2% on Wednesday after the company's fourth-quarter earnings forecast fell short of analyst expectations. See our full article here.

Is now the time to buy Avnet? Access our full analysis report here.

The Cheesecake Factory : Restaurant company Cheesecake Factory fell by 5.3% on Wednesday after the company reported mixed third-quarter 2025 financial results, with a revenue miss overshadowing an earnings beat. See our full article here.

Is now the time to buy The Cheesecake Factory? Access our full analysis report here.

Beyond Meat : Plant-based protein company Beyond Meat fell by 7.8% on Wednesday after it announced the final results of a debt exchange offer that included the potential issuance of a large number of new common shares. See our full article here.

Is now the time to buy Beyond Meat? Access our full analysis report here.

Huron : Professional services firm Huron Consulting Group rose by 12% on Wednesday after the company reported third-quarter financial results that surpassed analyst expectations and raised its full-year earnings forecast. See our full article here.

Is now the time to buy Huron? Access our full analysis report here.