What Happened?

A number of stocks fell in the afternoon session after a broad sell-off in the software sector was triggered by mixed earnings from industry leaders SAP and ServiceNow. 

The negative sentiment across the industry was sparked after SAP's cloud backlog and its cloud revenue outlook fell short of some forecasts. Similarly, ServiceNow's stock dropped despite reporting better-than-expected results, fueling concerns that rising AI-related costs could pressure profits for enterprise software companies. The news sparked broader fears that AI was transforming the sector faster than companies could capitalize on it, leading the S&P 500 Software and Services Index to fall.

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:

• Data Infrastructure company Oracle (NYSE: ORCL) fell 4.8%. Is now the time to buy Oracle? Access our full analysis report here, it’s free.
• Lending Software company Upstart (NASDAQ: UPST) fell 4.6%. Is now the time to buy Upstart? Access our full analysis report here, it’s free.
• Marketing Software company Upland Software (NASDAQ: UPLD) fell 4.2%. Is now the time to buy Upland Software? Access our full analysis report here, it’s free.
• Video Conferencing company Zoom (NASDAQ: ZM) fell 4.4%. Is now the time to buy Zoom? Access our full analysis report here, it’s free.
• E-commerce Software company GoDaddy (NYSE: GDDY) fell 4.5%. Is now the time to buy GoDaddy? Access our full analysis report here, it’s free.

Zooming In On Oracle (ORCL)

Oracle’s shares are very volatile and have had 24 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 gained 3.4% on the news that the deal for a stake in TikTok's U.S. operations was officially confirmed. 

The confirmation came from an internal memo to employees from TikTok CEO Shou Chew. As a result of the deal, Oracle, alongside private equity firm Silver Lake and Abu Dhabi-based MGX, collectively owned 45% of TikTok U.S. The total non-Chinese ownership in the new joint venture amounted to 80%, while the Chinese parent company ByteDance kept a 20% stake. The new business was established in compliance with a previous executive order.

Oracle is down 15.2% since the beginning of the year, and at $166.10 per share, it is trading 49.4% below its 52-week high of $328.33 from September 2025. Investors who bought $1,000 worth of Oracle’s shares 5 years ago would now be looking at an investment worth $2,747.

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