What Happened?
Shares of identity management company Okta (NASDAQ: OKTA) jumped 3.1% in the afternoon session after a broader market rally drove investor optimism in artificial intelligence and big tech stocks.
The S&P 500, Dow Jones, and Nasdaq all pushed higher, approaching record levels set late last year. Much of the positive momentum was linked to the technology sector, with a particular focus on companies advancing artificial intelligence, a key theme at the annual CES trade show in Las Vegas. This continued a powerful trend from 2025, when AI-related developments were a primary catalyst for the market's bull run. The upbeat sentiment was further supported by hopes for easier monetary policy from the Federal Reserve following a weaker-than-expected US Services PMI reading.
After the initial pop the shares cooled down to $90.38, up 3% from previous close.
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What Is The Market Telling Us
Okta’s shares are somewhat volatile and have had 10 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 biggest move we wrote about over the last year was 10 months ago when the stock gained 22.6% on the news that the company delivered a solid fourth quarter earnings, beating Wall Street's expectations on both revenue and operating profit.
A standout metric was the 25% year-on-year growth in remaining performance obligations (RPO), which exceeded analysts' estimates, and implied solid future sales as customers lock in long-term commitments. Sales were up 13% from last year, with nearly all of it coming from subscriptions. Margins also improved meaningfully, driven by tight cost controls and stronger revenue. That helped earnings per share come in ahead of estimates, showing the company's ability to turn sales into profit. Looking ahead, full-year sales guidance topped Wall Street forecasts, though expected sales growth of 9-10% signals some slowdown compared to this year. Overall, this was a strong quarter.
Okta is up 8.1% since the beginning of the year, but at $90.38 per share, it is still trading 29% below its 52-week high of $127.30 from May 2025. Investors who bought $1,000 worth of Okta’s shares 5 years ago would now be looking at an investment worth $377.02.
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