What Happened?
A number of stocks fell in the afternoon session after a broad sell-off in the software sector was triggered by mixed earnings from industry leaders SAP and ServiceNow.
The negative sentiment across the industry was sparked after SAP's cloud backlog and its cloud revenue outlook fell short of some forecasts. Similarly, ServiceNow's stock dropped despite reporting better-than-expected results, fueling concerns that rising AI-related costs could pressure profits for enterprise software companies. The news sparked broader fears that AI was transforming the sector faster than companies could capitalize on it, leading the S&P 500 Software and Services Index to fall.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Vulnerability Management company Tenable (NASDAQ: TENB) fell 4.5%. Is now the time to buy Tenable? Access our full analysis report here, it’s free.
- Healthcare And Life Sciences Software company Veeva Systems (NYSE: VEEV) fell 5%. Is now the time to buy Veeva Systems? Access our full analysis report here, it’s free.
- E-commerce Software company Wix (NASDAQ: WIX) fell 4.2%. Is now the time to buy Wix? Access our full analysis report here, it’s free.
- HR Software company Paycom (NYSE: PAYC) fell 3.8%. Is now the time to buy Paycom? Access our full analysis report here, it’s free.
- Data Analytics company Amplitude (NASDAQ: AMPL) fell 5.2%. Is now the time to buy Amplitude? Access our full analysis report here, it’s free.
Zooming In On Amplitude (AMPL)
Amplitude’s shares are very volatile and have had 27 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 7 days ago when the stock gained 6.4% on the news that reports of easing geopolitical tensions in Greenland boosted investor sentiment. The relief rally saw major indices, including the S&P 500 and the tech-heavy Nasdaq Composite, rebound as investors moved back into riskier assets. This positive shift was reflected across the technology landscape, with all of the Magnificent Seven tech firms seeing their shares climb. The easing of international friction reduced market uncertainty, which often encourages investment in growth-oriented sectors like technology. The move was part of a broader market upswing, with the Dow Jones Industrial Average adding 500 points, signaling increased investor confidence.
Amplitude is down 14.4% since the beginning of the year, and at $9.35 per share, it is trading 35.2% below its 52-week high of $14.44 from February 2025. Investors who bought $1,000 worth of Amplitude’s shares at the IPO in September 2021 would now be looking at an investment worth $170.69.
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