D.A. Davidson maintains Procore stock rating on margin outlook By Investing.com

Procore Technologies fell 12% after quarterly results that included a revenue beat of about 2% but an EPS miss and slightly weaker-than-expected Q2 guidance. D.A. Davidson reiterated a Neutral rating and $55 price target, while noting the stock’s 30%+ decline over the past six months and constructive operating margin guidance. Revenue was $359.28 million versus $352.82 million expected, but EPS came in at $0.34 versus $0.36 consensus.

Analysis

The market is treating AMD and PCOR as two very different signals, but the common thread is positioning around growth scarcity. AMD’s move likely reflects investors reassessing AI capex concentration: when hyperscalers keep spending, the second-order beneficiaries are not just the GPU leaders but also the memory, networking, and advanced packaging chains, which typically lag the first impulse by 1-2 quarters. That creates a broader basket trade opportunity beyond the headline semiconductor name, especially if this is less about one product cycle and more about a durable data-center budget reallocation.

For Procore, the issue is not the size of the beat/miss mix; it is the market’s intolerance for any evidence that construction software is slowing while multiples remain elevated versus current growth. If pipeline remains broad-based but conversion elongates, the stock can stay under pressure for months because investors will demand cleaner net retention and margin inflection before re-rating. The constructive angle is that high gross margin software with improving operating discipline can re-emerge quickly if macro fear fades, making this a candidate for mean reversion rather than a broken story.

The contrarian read is that the selloff in PCOR may be overdone relative to the underlying franchise quality, but only if bookings stabilize over the next 1-2 quarters; otherwise, the market will keep anchoring to forward multiple compression. In AMD, the risk is that the rally front-runs the actual earnings inflection and invites disappointment if supply or customer concentration limits upside. The cleanest setup is to express the AI upside through a relative-value basket rather than a single-name chase, while treating PCOR as a tactical short-covering candidate on signs of stabilized demand.

Key Decisions for Investors

• Long AMD / short XLK on a 1-3 month horizon: isolate AI upside from broader mega-cap tech beta; target continuation if data-center spend revisions persist, but cut if AMD underperforms semis ex-AI on the next read-through.
• Initiate a basket long in AI infrastructure beneficiaries (AVGO, ANET, MRVL) over the next 2-6 weeks: AMD strength is likely to spill into adjacent supply-chain names with less event risk and better asymmetry if capex breadth, not just unit growth, is the real driver.
• Start a tactical short or put spread in PCOR for the next earnings cycle only if channel checks show elongating sales cycles: downside can persist another 10-15% if the market concludes growth is decelerating, but risk/reward improves materially if shares overshoot to a discount to historical multiples.
• Consider a pairs trade long PCOR / short a lower-quality SaaS peer with weaker margins: if the market is punishing guidance broadly, Procore’s gross margin profile and upmarket momentum should defend better than names with slower route-to-profitability.
• Do not chase AMD here; prefer call spreads over outright stock if expressing upside. A 1-2 quarter upside window exists, but the post-rally setup raises the odds of a digestion phase before the next leg higher.