What Happened?

Shares of energy drink company Celsius (NASDAQ:CELH) jumped 5.7% in the afternoon session as stocks rebounded to start the session amid continued market volatility and moved slightly higher after the Federal Open Market Committee kept rates at 4.25% to 4.50% in its March 2025 meeting. The Jerome Powell-led committee also hinted at two more rate cuts for the year, saying, "Uncertainty around the economy has grown." 

The good news is that holding rates steady and signaling two additional cuts this year means no surprises (the market dislikes surprises). The bad news is that the Fed reduced its outlook growth to 1.7%, down from the previous projection of 2.1% in December. At the same time, the inflation outlook was raised to a 2.8% annual increase for core prices, up from the prior projection of 2.5%. This suggests the Fed sees the macro tilting towards a stagflation scenario, where inflation rises as economic growth slows.

The shares closed the day at $31.87, up 5% from previous close.

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What The Market Is Telling Us

Celsius’s shares are extremely volatile and have had 36 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business. 

The previous big move we wrote about was 27 days ago when the stock gained 39% on the news that the company delivered exceptional fourth quarter 2024 results, which blew past analysts' EBITDA, EPS, and revenue estimates, suggesting the struggles surrounding its controversy with Pepsi, where it oversold inventory to the behemoth, could be approaching the rearview mirror. 

Separately, the company announced its acquisition of Alani Nu, a popular up-and-coming energy drink brand. Zooming out, we think this was a solid quarter.

Celsius is up 17.3% since the beginning of the year, but at $31.90 per share, it is still trading 66.8% below its 52-week high of $96.09 from May 2024. Investors who bought $1,000 worth of Celsius’s shares 5 years ago would now be looking at an investment worth $22,948.

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