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:

• Marketing Software company Braze (NASDAQ: BRZE) fell 8.1%. Is now the time to buy Braze? Access our full analysis report here, it’s free.
• Document Management company DocuSign (NASDAQ: DOCU) fell 10.7%. Is now the time to buy DocuSign? Access our full analysis report here, it’s free.
• Sales Software company HubSpot (NYSE: HUBS) fell 11.1%. Is now the time to buy HubSpot? Access our full analysis report here, it’s free.
• Data Storage company Snowflake (NYSE: SNOW) fell 8.3%. Is now the time to buy Snowflake? Access our full analysis report here, it’s free.
• Cloud Monitoring company PagerDuty (NYSE: PD) fell 12.1%. Is now the time to buy PagerDuty? Access our full analysis report here, it’s free.

Zooming In On PagerDuty (PD)

PagerDuty’s shares are quite volatile and have had 17 moves greater than 5% over the last year. But moves this big are rare even for PagerDuty and indicate this news significantly impacted the market’s perception of the business.

The previous big move we wrote about was 12 days ago when the stock gained 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.

PagerDuty is down 28.3% since the beginning of the year, and at $8.89 per share, it is trading 54.7% below its 52-week high of $19.60 from March 2025. Investors who bought $1,000 worth of PagerDuty’s shares 5 years ago would now be looking at an investment worth $167.07.

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