As Marc Chaikin has often said, the only thing more important than the stocks you own is the stocks you don't own... Everyone wants to find stocks poised to soar. But for long-term investing success, it's also critical to avoid the traps.
A 50% Collapse After the Power Gauge Signaled Caution
By Ethan Goldman, junior analyst, Chaikin Analytics
As Marc Chaikin has often said, the only thing more important than the stocks you own is the stocks you don't own...
Everyone wants to find stocks poised to soar. But for long-term investing success, it's also critical to avoid the traps.
And once again, I have the Power Gauge to thank for spotting another breakdown in a popular stock...
Back in October, I noticed that the Power Gauge changed its tune on video-game platform Roblox (RBLX).
As I said at the time, Roblox had soared by an incredible 206% over the past 12 months.
Naturally, the Power Gauge rated the stock as "bullish" during the bulk of that growth.
However, I also shared Roblox's history of rapid growth and losses...
The stock grew 94% in the eight months after the company went public. Then, it collapsed by 83% over the following six months.
Folks, this isn't ancient history for Roblox. The stock went public a little less than five years ago...
As you'll recall from my October essay, I said the "smart money" on Wall Street supported Roblox through its second wave of growth. And the Power Gauge saw that support reverse in late 2025.
Given Roblox's volatile history and warnings from the Power Gauge, it wasn't hard to predict what the stock was about to do...
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The Smart Money Flees Roblox as Its Share Price Sinks
Since that October 13 PowerFeed issue, Roblox is down about 50%. And the big-name investors on Wall Street kept moving their money out of the stock.
Take a look at the chart below...
You'll see that Roblox's stock plummeted in late October. By the end of the month, its relative strength versus the S&P 500 Index turned negative.
As Roblox continued to fall, the Power Gauge flashed sell alerts for the stock. The first one came on December 10, 2025. That's right around when Roblox fell into "bearish" territory in our system.
As you can see, the stock kept falling after the rating change. Today, Roblox still earns a negative overall grade in the Power Gauge.
Remember, Roblox lost 83% of its value the first time it plunged. Considering the "bearish" rating right now, I won't be surprised to see the stock continue to fall.
Of course, I also said the stock has a history of rapid gains as well. But the video-game industry recently caught a new headwind that could postpone another spike in value for Roblox...
A Tech Titan Sows Chaos in Video-Game Industry
Last Thursday, Alphabet's (GOOGL) Google rolled out access to a new AI model. It calls this new model Genie 3.
Here's the exact description from the Genie 3 website...
Genie 3 is a general-purpose world model. It uses simple text descriptions to generate photorealistic environments that can be explored in real-time.
Put simply, Genie 3 is a major step in AI use in video-game development. Google even touts it as a "key stepping stone on the path to AGI [artificial general intelligence]."
AGI is a way to describe an AI model that can match humans at anything.
Of course, that means video-game development as well.
Genie 3 does have some limitations. But its release further spooked Roblox's investors...
The stock dropped 13% in a single day after the Genie 3 announcement. Other video-game stocks also took a major hit...
Take-Two Interactive Software (TTWO) dropped about 8%. And Unity Software (U) – which creates software for game developers – collapsed by roughly 24%.
We saw how fast AI advanced in 2025. And it's impossible to fully predict what the future of the technology holds.
But when it comes to Roblox's stock, we don't need to take wild guesses...
The Power Gauge previously flashed clear warning signs. And it's still saying to avoid the stock right now.
Good investing,
Ethan Goldman Editor's note: If you don't already have access to the Power Gauge, you can get it as part of a special offer for Marc's Power Gauge Report newsletter...
This offer includes a full year of access to our one-of-a-kind system – and its ratings and data on more than 5,000 stocks. Plus, you'll be fully protected by our 30-day, 100% money-back guarantee.
— According to the Chaikin Power Bar, Small Cap stocks and Large Cap stocks are Bullish. Major indexes are mixed.
* * * *
Sector Tracker
Sector movement over the last 5 days
Consumer Staples
+5.67%
Energy
+5.55%
Materials
+3.88%
Industrials
+3.2%
Financial
+1.83%
Real Estate
+1.49%
Health Care
+1.11%
Communication
+0.04%
Utilities
-0.58%
Consumer Discretionary
-1.37%
Information Technology
-7.44%
* * * *
Industry Focus
NYSE Technology Services
10
22
7
Over the past 6 months, the NYSE Technology subsector (XNTK) has outperformed the S&P 500 by +3.78%. Its Power Bar ratio, which measures future potential, is Strong, with more Bullish than Bearish stocks. It is currently ranked #14 of 21 subsectors and has moved down 1 slot over the past week.
Top Stocks
GOOGL
Alphabet Inc.
AMAT
Applied Materials, I
ASML
ASML Holding N.V.
* * * *
Top Movers
Gainers
SMCI
+13.78%
FTV
+10.63%
LLY
+10.33%
ODFL
+9.89%
CDW
+9.45%
Losers
BSX
-17.59%
AMD
-17.31%
APP
-16.12%
SNDK
-15.95%
PLTR
-11.62%
* * * *
Earnings Report
Earnings Surprises
FOXA Fox Corporation
Q2
$0.82
Beat by $0.30
MKL Markel Group Inc.
Q4
$37.41
Beat by $11.68
ALL The Allstate Corporation
Q4
$14.31
Beat by $4.45
PTC PTC Inc.
Q1
$1.92
Beat by $0.36
ESS Essex Property Trust, Inc.
Q4
$1.25
Missed by $-0.22
* * * *
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