What Happened?

A number of stocks fell in the afternoon session after markets remained volatile during the last trading session of the week, reflecting growing uncertainty, with the broad market retreat erasing the sector's gains from the previous day. 

As detailed by CNBC, major market averages initially dropped on Wednesday following the Federal Reserve's first interest rate hike in three years, then staged a strong tech-led comeback on Thursday, before falling once more. According to market commentators, after tech stocks surged during Thursday's rebound, investors quickly engaged in widespread profit-taking on Friday as the benchmark 10-year Treasury yield crept back above the critical five percent threshold. 

As highlighted by financial analysts at Reuters, this elevated volatility reflects the market grappling with tighter borrowing conditions, where climbing risk-free rates uniquely pressure high-valuation software providers by increasing the discount rate applied to their future cash flows.

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:

• Endpoint Security company CrowdStrike (NASDAQ: CRWD) fell 2.8%. Is now the time to buy CrowdStrike? Access our full analysis report here, it’s free.
• Sales Software company HubSpot (NYSE: HUBS) fell 4.2%. Is now the time to buy HubSpot? Access our full analysis report here, it’s free.
• Tax Software company Intuit (NASDAQ: INTU) fell 3.7%. Is now the time to buy Intuit? Access our full analysis report here, it’s free.
• Content Delivery company Cloudflare (NYSE: NET) fell 4.3%. Is now the time to buy Cloudflare? Access our full analysis report here, it’s free.
• Identity Management company Okta (NASDAQ: OKTA) fell 3.4%. Is now the time to buy Okta? Access our full analysis report here, it’s free.

Zooming In On Cloudflare (NET)

Cloudflare’s shares are extremely volatile and have had 37 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 4 days ago when the stock gained 6.3% on the news that shares of enterprise software and SaaS companies rallied broadly as investors rotated capital out of semiconductor and AI-hardware stocks following calls for an artificial intelligence development slowdown. According to Reuters, while chipmakers and hardware providers faced steep sell-offs after leaders from Anthropic and OpenAI urged a pause in frontier AI advancement, software stocks bucked the broader tech trend and climbed higher in early trading. Market participants viewed the potential deceleration in AI infrastructure spending as a catalyst to rotate back into traditional enterprise software names like ServiceNow, Salesforce, and Adobe. Investors have increasingly feared that unchecked AI progress could yield autonomous agents capable of bypassing traditional software interfaces entirely. A development freeze limits that threat. It also gives incumbent platforms breathing room to package AI as a feature within their own ecosystems, preserving their recurring revenue without the immediate risk of frontier models rendering their core software obsolete. Broadly, these SaaS companies are perceived as less vulnerable to a sudden halt in hyperscaler capital expenditures; instead, they offer steady recurring revenue streams and are positioned to benefit from a more deliberate, measured integration of existing AI tools into corporate workflows rather than a frantic, capital-intensive race for raw compute power.

Cloudflare is up 64.7% since the beginning of the year, and at $322.76 per share, it is trading close to its 52-week high of $333.94 from September 2026. Investors who bought $1,000 worth of Cloudflare’s shares 5 years ago would now be looking at an investment worth $2,538.

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