Shares of Carnival (CCL 1.90%), the world’s largest cruise line, were pulling back on Monday after a strong earnings report. Carnival delivered another quarter of record results during its third quarter, the seasonally strongest period of the year.

Revenue in the quarter rose 3.3% to $8.15 billion, which edged out estimates at $8.11 billion. Net yields, or prices, hit an all-time high over the last four quarters, which helped the company deliver strong margin expansion. Adjusted net income improved from $1.75 billion to $1.98 billion, or $1.43 per share, which was better than the consensus at $1.32.

Carnival also raised its guidance, reflecting improved net yields and effective cost management. It’s now calling for adjusted net income to rise 55% for the year to $2.95 billion, or $2.14 a share. Additionally, it sees net yields up 5.3%, compared to a 3.3% increase in adjusted costs, and it expects a 15% increase in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to $7.05 billion.

Despite the strong results, Carnival stock fell on the news. It closed Monday’s session down 4%, despite an initial spike on the news. The reason for the decline wasn’t clear. Investors might have expected better results, or they think enough optimism is baked into the stock, as shares were running higher before the report came out.

Carnival stock is now down 10.4% from its peak just a month ago, and the pullback sets up an attractive buy-the-dip opportunity. Here are three reasons why.

1. Booking trends remain strong

Despite concerns about an economic slowdown in the U.S., Carnival continues to see strong booking trends going forward, a sign that demand for its cruises continues to grow. It reported record customer deposits for the quarter at $7.1 billion, and management said that booking trends strengthened through the quarter and are higher than a year ago.

Nearly half of 2026 is booked at historical high prices for both the U.S. and Europe, and the company said it had record booking volumes for 2027.

Celebration Key, its new private island in the Caribbean, is off to a great start. Management said that the new island has received reviews, and returns on the investment are meeting expectations. Momentum for the business is clearly robust, and management expects Celebration Key to be a major demand driver.

2. Interest rates are coming down

Operationally, Carnival is doing phenomenally, but the stock is still weighed down by the massive debt load it took on to stay afloat during the pandemic shutdowns.

It continues to pay off that debt, and finished the fourth quarter with $26.5 billion, down more than $1 billion from the beginning of the fiscal year. It also refinanced $4.5 billion in debt during the quarter, helping to lower its interest expense, which fell from $431 million in the quarter a year ago to $317 million.

The Federal Reserve cut the benchmark Fed funds rate by 25 basis points earlier in September, and expects to make two more similar cuts over the rest of the year. That should allow Carnival more opportunities to lower its average interest rate, especially given the strength of the business. By cutting interest expense, it can grow net income even without an increase in operating profit.

3. The stock is still a good value

Carnival has been a winner since the pandemic, largely because of its execution and growth, but also because the stock offers a good value. Based on the adjusted earnings per share forecast of $2.17 for this year, it now trades at a forward price-to-earnings (P/E) of just 13.5.

Cruise stocks can be risky, due to their vulnerability to black swan events like the pandemic, or even economic downturns. But Carnival’s recent results give investors good reason to expect smooth sailing ahead. Demand trends look great. It’s steadily reducing its debt burden, and investments like Celebration Key should pay off over the long term.

The recent pullback looks like a great opportunity for Carnival stock.

Shares of leading online pet goods retailer Chewy (CHWY 2.26%) are down 15% this week as of 1 p.m. ET on Thursday, according to data provided by S&P Global Market Intelligence. Chewy reported second-quarter earnings on Wednesday, delivering a 9% increase in sales and a 38% rise in adjusted earnings per share (EPS).

However, management guided for a slower 7.5% sales growth and just $0.30 in adjusted EPS (down from $0.33 in Q2) in its upcoming quarter, prompting this week’s sell-off.

Market reaction aside, Chewy is firing on all cylinders

Drops like these are peculiar. Yes, guidance was a bit conservative, but there’s a solid chance that Chewy ends up beating its estimates anyway in the upcoming quarter.

And as for the company’s actual Q2 results, things look great.

Not only were sales up 9%, but Chewy’s autoship sales (such as recurring dog food purchases) rose 15% — now accounting for 83% of the company’s total sales. These figures indicate that the majority of Chewy’s sales are recurring, predictable, and stable, establishing a substantial sales base that should only grow over time.

On top of this stability, the company is diving into numerous higher-margin verticals, such as:

• Sponsored ads, which were a key driver for Chewy’s gross margin rising 90 basis points
• Chewy+, a new $49 per year membership program, which already equalled 3% of sales in July
• The launch of Get Real, a private-label, fresh dog food brand with premium pricing potential
• The opening of 20 total Chewy Vet Care locations by year’s end, bringing higher margins from the veterinary industry

Trading at 29 times forward earnings and with its profit margins set to continue improving over time, Chewy remains one of my favorite stocks right now — even after rising 29% over the last year.

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Though Nvidia (NVDA -1.02%) stock has been under pressure so far in 2025 owing to several factors outside of the company’s control, such as tariffs and concerns that spending on artificial intelligence (AI) hardware could slow down thanks to the arrival of cost-efficient models, recent stock price action suggests that the company is making a solid comeback.

Shares of the chip designer have shot up by 28% in the past month. The good part is that Nvidia is still trading at an attractive valuation even after its recent surge. However, with the company set to release its fiscal 2026 first-quarter results after the market closes on May 28, it could become more expensive to buy for investors who are sitting on the sidelines.

Let’s see why that may be the case.

Nvidia seems set to deliver blowout results once again

Nvidia’s guidance for the first quarter of fiscal 2026 (which ended on April 27) calls for $43 billion in revenue at the midpoint of its guidance range. That would translate into a year-over-year increase of 65%. However, there is a good chance that Nvidia may be able to coast past that expectation thanks to the tremendous demand for its AI graphics processing units (GPUs).

There have been concerns that the demand for Nvidia’s AI GPUs could wane because of the tariff-fueled turmoil, as well as a potential drop in AI spending because of the emergence of DeepSeek’s cost-effective but competent reasoning model. Yet recent chatter indicates that the actual story might turn out to be different.

For instance, Reuters reported last month that Chinese firms have placed orders for $16 billion worth of Nvidia’s H20 GPUs in the first quarter of calendar 2025. The orders for this chip have reportedly surged following the increase in demand for cost-efficient AI models in the wake of DeepSeek’s breakthrough. Chinese tech giants such as Alibaba, Tencent, and ByteDance are said to be stocking up on Nvidia’s chips, anticipating a shortage in their supply because of export restrictions imposed on the chipmaker.

Nvidia’s revenue from China stood at $17 billion in all of fiscal 2025. So, the above estimate of $16 billion indicates that it may have done a year’s worth of business with Chinese customers in just a quarter. Of course, you may be wondering if the previous U.S. administration’s decision to ban sales of Nvidia’s China-specific H20 processors is going to dent the company’s outlook by costing billions of dollars in sales. However, the Trump administration plans to modify and pull back some of the previous regime’s export curbs, and that could turn out to be a tailwind for Nvidia’s Chinese business.

At the same time, investors should note that Nvidia has reportedly modified its H20 AI chip to meet the restrictions and will release the updated version in July. Nvidia is said to have modified its chips in the past to ensure that it remains on the right side of the export restrictions that it faces from time to time, and that has allowed the company to remain a key player in the Chinese AI market.

So, while Chinese-related business is likely to help Nvidia deliver stronger-than-expected results for the previous quarter, strong AI spending in the U.S. could give its outlook a big boost. A recent report from the Financial Times suggests that Oracle is set to buy $40 billion worth of Nvidia’s Blackwell AI chips for deployment in OpenAI’s data center in the U.S.

This investment is reportedly outside of the $500 billion investment that OpenAI and its partners have pledged in U.S.-based AI infrastructure in the form of the Stargate Project. Nvidia’s business is expected to receive a nice boost from Stargate, and that’s another reason why the company’s guidance for the current quarter could exceed consensus expectations.

The valuation is too attractive to ignore right now

Analysts are expecting Nvidia’s earnings to increase by just 20% year over year in the current quarter. This can be attributed to the margin compression that the company is anticipating during the initial production ramp of its Blackwell processors. However, stronger-than-expected growth in Nvidia’s top line could allow it to mitigate the negative margin impact and deliver a bigger jump in earnings.

Meanwhile, Nvidia management points out that its margin profile will return to the normal range later this year when Blackwell production is fully ramped up. So, Nvidia’s earnings growth is likely to pick up momentum as the year progresses. Consensus estimates point toward something similar, expecting Nvidia’s earnings to jump 46% year over year in fiscal Q2.

That’s why savvy investors should consider buying Nvidia before May 28, as it is trading at 30 times forward earnings right now, which is well below its five-year average forward earnings multiple of 40. Even the tech-laden Nasdaq-100 index has an average earnings multiple of 31. All this suggests that investors are getting a terrific deal on Nvidia stock right now, and they may not want to miss it since the stage seems set for a strong set of quarterly results and guidance from the company that could supercharge its recent rally.

Harsh Chauhan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia, Oracle, and Tencent. The Motley Fool recommends Alibaba Group. The Motley Fool has a disclosure policy.