What Happened?
A number of stocks jumped in the afternoon session after a robust earnings report and upgraded annual revenue forecast from networking giant Cisco Systems, fueled optimism in the software sector.
Cisco's impressive results were driven by strong demand from hyperscaler clients, the massive companies that dominate cloud computing, who are pouring capital into artificial intelligence infrastructure. This report was viewed by investors as a positive bellwether for the entire tech ecosystem.
The voracious appetite for AI is not only benefiting chipmakers but also the companies providing the essential networking hardware required to support these advanced systems. Cisco's performance reinforces the market narrative that the AI boom is generating substantial and sustained spending across the broader technology landscape, lifting investor sentiment sector-wide.
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:
- Tax Software company BlackLine (NASDAQ: BL) jumped 6.1%. Is now the time to buy BlackLine? Access our full analysis report here, it’s free.
- Marketing Software company Upland Software (NASDAQ: UPLD) jumped 10.5%. Is now the time to buy Upland Software? Access our full analysis report here, it’s free.
- Automation Software company ServiceNow (NYSE: NOW) jumped 4.5%. Is now the time to buy ServiceNow? Access our full analysis report here, it’s free.
- Data Analytics company Strategy (NASDAQ: MSTR) jumped 6.4%. Is now the time to buy Strategy? Access our full analysis report here, it’s free.
- Advertising Software company AppLovin (NASDAQ: APP) jumped 7.1%. Is now the time to buy AppLovin? Access our full analysis report here, it’s free.
Zooming In On Upland Software (UPLD)
Upland Software’s shares are extremely volatile and have had 59 moves greater than 5% over the last year. But moves this big are rare even for Upland Software and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 2 days ago when the stock dropped 5.5% 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.
Upland Software is down 48.7% since the beginning of the year, and at $0.77 per share, it is trading 74% below its 52-week high of $2.96 from August 2025. Investors who bought $1,000 worth of Upland Software’s shares 5 years ago would now be looking at only $18.73.
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