What Happened?
Shares of digital insurance provider Lemonade (NYSE:LMND) jumped 28.2% in the morning session after the company posted strong second-quarter financial results that beat Wall Street estimates and raised its full-year outlook. The AI-powered insurer posted revenue of $164.1 million and a loss of $0.60 per share, both of which topped analyst estimates. Company management attributed the strong performance to accelerating growth and healthy underwriting. Furthermore, Lemonade lifted its full-year 2025 revenue forecast to between $710 million and $716 million. The company also reported that its in-force premium, a key metric representing the value of all active policies, climbed 29% from the previous year to $1.08 billion, a sign of robust customer expansion.
Is now the time to buy Lemonade? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Lemonade’s shares are extremely volatile and have had 59 moves greater than 5% over the last year. But moves this big are rare even for Lemonade and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 25 days ago when the stock dropped 4.9% on the news that the Trump administration announced intentions to impose a 35% tariff on many goods imported from Canada.
This move is far more than a typical trade dispute; it targets the United States' largest and most deeply integrated trading partner. Canada is not merely a neighbor but a critical component of North American supply chains, particularly in sectors like automotive, energy, and critical minerals. This move sparked concerns about potential retaliatory actions and a wider impact on the North American economy, leading to a risk-off sentiment among investors. The S&P 500, Dow Jones Industrial Average, and Nasdaq all opened lower, pulling back from recent record highs and heading for their first weekly loss in three weeks.
Lemonade is up 29.8% since the beginning of the year, and at $47.24 per share, it is trading close to its 52-week high of $51.81 from November 2024. Investors who bought $1,000 worth of Lemonade’s shares 5 years ago would now be looking at an investment worth $732.60.
Unless you’ve been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) semiconductor stock benefiting from the rise of AI. Click here to access our free report on our favorite semiconductor growth story.