September 9, 2026
Chewy shares plunged 9.7 percent after it raised full-year guidance and talked up AI initiatives.
What happened
Online pet retailer Chewy raised its full-year outlook for organic net sales growth and adjusted EBITDA margin. At the same time, it emphasized a confident tone around new AI initiatives. Despite the raised forecast, the stock fell 9.7 percent, a move larger than 99 percent of its daily moves over the past three years.
Why it matters
The market reaction wiped out roughly 100 billion dollars of value. A selloff on improved guidance signals investors either expected much more, or they are punishing the cost of the AI buildout the confident tone implies. The mechanism is a classic "sell the news" where the actual raise falls short of whispered expectations, or where margin pressure from tech investment outweighs the higher sales path.
The case against
The plunge may be a simple recalibration after a strong run, not a verdict on the business. The raised guidance still points to faster growth and better profitability. If the AI spending unlocks real efficiency, today's drop could look like a short-term overreaction to a long-term positive signal.
What settles it
Whether Chewy's next quarterly report shows margins expanding or shrinking as the AI spending ramps up.