What Happened?
Shares of medical device company Merit Medical Systems (NASDAQ:MMSI) jumped 3.6% in the afternoon session after a softer-than-expected inflation report fueled hopes for interest rate cuts by the Federal Reserve. The January Consumer Price Index (CPI), a key measure of inflation, rose by 0.2%, which was less than economists had forecast, with the annual rate cooling to 2.4%. This encouraging data increased market expectations for the Fed to begin cutting interest rates as early as June. The news prompted a rally in Treasuries as their yields fell. While the market's reaction was initially described as a "bumpy ride" due to concerns in other sectors, the favorable inflation data ultimately helped calm Wall Street. Lower inflation is a key prerequisite for the central bank to ease its monetary policy, which is generally supportive of stock valuations.
After the initial pop the shares cooled down to $81.53, up 3.4% from previous close.
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What Is The Market Telling Us
Merit Medical Systems’s shares are not very volatile and have only had 6 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 4 months ago when the stock gained 6% on the news that the company reported strong third-quarter 2025 financial results that beat Wall Street expectations and raised its full-year guidance. The medical device maker announced revenue of $384.2 million, up 13% year on year and ahead of analyst estimates. Its adjusted earnings per share also came in strong at $0.92, easily clearing Wall Street's projections. A key highlight was the company's organic revenue growth of 7.8%, which significantly outpaced expectations. Buoyed by this performance, Merit Medical increased its outlook for the full year, lifting its revenue guidance to a midpoint of $1.51 billion and its adjusted earnings per share forecast to a midpoint of $3.73.
Merit Medical Systems is down 5.7% since the beginning of the year, and at $81.53 per share, it is trading 25.5% below its 52-week high of $109.38 from February 2025. Investors who bought $1,000 worth of Merit Medical Systems’s shares 5 years ago would now be looking at an investment worth $1,348.
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