What Happened?
A number of stocks fell in the morning session after a broad sell-off swept through the software sector, driven by growing concerns about the impact of artificial intelligence. This led to institutional repositioning as traders pivot away from traditional SaaS providers in favor of companies with more defensible, AI-integrated moats. The tech-heavy Nasdaq Composite index declined by 0.8%, while the broader S&P 500 also slipped.
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:
- Banking Software company nCino (NASDAQ: NCNO) fell 8.5%. Is now the time to buy nCino? Access our full analysis report here, it’s free.
- Cloud Monitoring company Dynatrace (NYSE: DT) fell 8.7%. Is now the time to buy Dynatrace? Access our full analysis report here, it’s free.
- Marketing Software company Sprout Social (NASDAQ: SPT) fell 8.8%. Is now the time to buy Sprout Social? Access our full analysis report here, it’s free.
- Data Analytics company Amplitude (NASDAQ: AMPL) fell 9.2%. Is now the time to buy Amplitude? Access our full analysis report here, it’s free.
- Hospitality & Restaurant Software company Agilysys (NASDAQ: AGYS) fell 8.4%. Is now the time to buy Agilysys? Access our full analysis report here, it’s free.
Zooming In On Amplitude (AMPL)
Amplitude’s shares are very volatile and have had 28 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 5 days ago when the stock dropped 5.2% on the news that 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.
Amplitude is down 27% since the beginning of the year, and at $7.98 per share, it is trading 44.8% 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 $145.53.
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