Three Stocks the Market Fears Right Now

Fear rarely lands evenly. Three stocks heading into September carry three distinct flavors of it: an earnings overhang, a valuation ceiling, and a leadership void. Each fear is real. None of them tells the whole story.

AVGO: The “Beat and Drop” Trap

Broadcom reports fiscal Q3 2026 results Wednesday, September 2, after the close. The bar is set: consensus estimates project revenue of approximately $29.4 billion and non-GAAP EPS near $3.24.

The fear is legitimate. After Broadcom’s fiscal Q2 report on June 3, shares dropped about 12% in a single session even though the company beat both revenue and EPS estimates. The selloff was driven largely by management reiterating, rather than raising, its fiscal 2027 AI semiconductor revenue target of “in excess of $100 billion,” disappointing investors who had been pricing in an upward revision.

What the fear misses: the backlog. Broadcom guided AI semiconductor revenue to reach $16 billion this quarter, representing year-over-year growth exceeding 200%. In fiscal Q2, management said AI semiconductor bookings exceeded $30 billion against $10.8 billion shipped, pointing to a backlog that supports multi-year visibility.

According to 49 analysts polled by S&P Global Market Intelligence, Broadcom has a consensus rating of “Strong Buy” and an average price target of $525.97 against a current price near $369. The binary Wednesday is real, but the business underneath it is not.

Watch: Whether CEO Hock Tan lifts the fiscal 2027 AI revenue guidance above $100 billion. That single sentence will move more than the headline numbers.

ABNB: Hated Below $125, Feared Above $185

Airbnb’s August 6 earnings erased months of skepticism in one session. The company reported results that topped analyst estimates and issued a better-than-expected forecast for the current period, citing strong demand across regions. The stock jumped about 9% in extended trading. Earnings per share came in at $1.37 versus $1.25 expected.

Now the concern flipped: the stock near $189 looks stretched. Phillip Securities downgraded Airbnb, pointing to valuation after the rally. That is a fair point on multiple. It is the wrong frame for what is actually building.

Airbnb said AI has allowed it to ship features at a faster pace, with the number of features shipped in the first half of 2026 up nearly 80% compared to a year earlier. Customer support costs per booking declined approximately 16% year over year, driven in part by an AI assistant that now resolves nearly 45% of issues without a human agent. That is margin expansion with a compounding quality to it, not a one-quarter fluke.

Q3 revenue is expected to come in between $4.69 billion and $4.77 billion, representing year-over-year growth in the mid teens. Full-year adjusted EBITDA margin guidance was raised to at least 35.5%, up from 35%. Bernstein called the Q2 report a “clear inflection point” and raised its price target to $217.

Watch: The September Q3 release. If free cash flow growth holds near the 30% pace reported in Q2, the valuation argument gets harder to sustain.

LULU: The Most Misunderstood Fear

Lululemon is the third stock and the most complicated case. LULU has plummeted roughly 68.5% over the past three years and is down about 40% in 2026 alone. The stock now trades at less than 10x trailing earnings. That multiple, on a company with historically thick margins and a global brand, demands an explanation beyond “consumer spending is soft.”

The honest answer is execution. The core business in the U.S. simply stopped growing. In Q1, revenue in the region fell 4% in constant currency. That is a problem considering the U.S. still accounts for the largest portion of the business. Meanwhile, net revenue from mainland China grew 24% year over year in the fourth quarter of fiscal 2025, with management expecting approximately 20% growth to continue in fiscal 2026.

The leadership reset is the real catalyst to track. Former Nike executive Heidi O’Neill will become Lululemon’s next CEO on September 8, 2026, and will join the Board the same day. O’Neill has more than three decades of industry experience, including more than 25 years at Nike spanning product creation and design, brand strategy, marketing, digital commerce, and global market operations.

LULU now trades around $121. That valuation leaves almost no room for optimism priced in. A credible Q2 report on September 3 combined with O’Neill’s first public comments could be enough to start closing that gap.

Watch: Whether O’Neill’s opening strategy addresses North American product innovation directly. Vague turnaround language will not move the stock. A concrete product reset timeline might.

The Cheat Sheet

• Top Theme: Earnings-driven fear is creating entry points in quality franchises with clear catalysts.
• Stock to Watch: AVGO. September 2 report either validates the AI backlog story or resets expectations again.
• Sector to Watch: Consumer discretionary, where LULU’s September 3 report and new CEO arrival land within 72 hours of each other.
• Biggest Risk: AVGO drops again post-earnings if guidance on fiscal 2027 AI revenue disappoints a second time. The June reaction shows how fast that move can happen.
• Biggest Opportunity: ABNB’s free cash flow trajectory and AI-driven cost structure are not fully reflected in a consensus price target that still trails the current share price.
• One Thing to Remember: All three stocks are being priced on what went wrong last quarter. September gives each one a chance to trade on what comes next.