What Happened?
A number of stocks jumped in the afternoon session after President Trump's state visit to Beijing lifted market sentiment across tech, with the S&P hitting a record high above 7,500.
While the Trump-Xi summit produced fewer concrete deals than investors had hoped for, the general mood around US-China trade relations shifted from confrontational to cautiously constructive and for a sector as globally exposed as software, that reduction in uncertainty was enough to drive buyers back in.
Adding to the positive sentiment, Figma posted 46% revenue growth with early AI monetisation showing genuine traction, and ServiceNow announced a multi-year AI partnership with Experian. Each print reinforced the same thesis: that enterprise software companies are successfully embedding AI into their products and charging for it, rather than being disrupted by it a concern that had weighed heavily on the sector earlier in the year.
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:
- Vertical Software company Guidewire Software (NYSE: GWRE) jumped 5%. Is now the time to buy Guidewire Software? Access our full analysis report here, it’s free.
- Video Conferencing company 8x8 (NASDAQ: EGHT) jumped 5.1%. Is now the time to buy 8x8? Access our full analysis report here, it’s free.
- Advertising Software company DoubleVerify (NYSE: DV) jumped 4.9%. Is now the time to buy DoubleVerify? Access our full analysis report here, it’s free.
- Video Conferencing company Five9 (NASDAQ: FIVN) jumped 4.7%. Is now the time to buy Five9? Access our full analysis report here, it’s free.
- Video Conferencing company RingCentral (NYSE: RNG) jumped 4.1%. Is now the time to buy RingCentral? Access our full analysis report here, it’s free.
Zooming In On 8x8 (EGHT)
8x8’s shares are extremely volatile and have had 55 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 3 days ago when the stock dropped 4.8% on the news that the latest Consumer Price Index (CPI) report came in hotter than expected, signaling that inflation remained stubbornly high.
The April CPI data revealed a 3.8% annual increase, surpassing economists' forecasts. This report is a key measure of inflation, tracking the average change in prices paid by consumers for goods and services. The persistent inflation is significant because it dampens expectations for the Federal Reserve to cut interest rates.
Higher interest rates for a longer period tend to negatively impact growth-oriented sectors like technology and software, as they make the companies' future earnings less valuable in today's terms. With the prospect of rate cuts diminishing, investors reassessed valuations, leading to a broad sell-off across the tech sector.
8x8 is up 25.1% since the beginning of the year, but at $2.37 per share, it is still trading 14.3% below its 52-week high of $2.76 from May 2026. Despite the year-to-date gain, investors who bought $1,000 worth of 8x8’s shares 5 years ago would now be looking at only $98.75.
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