What happened?
A number of stocks fell in the afternoon session after underwhelming earnings reports from tech giants Amazon and Intel (after mediocre earnings reports from Alphabet and ServiceNow the previous day) sparked widespread investor anxiety regarding aggressive artificial intelligence spending and sustained cash burn.
As reported by CNBC, disappointing quarterly reports from both companies triggered a broad slide across technology equities and hardware suppliers, overshadowing positive momentum in other areas of the market. Investors grew increasingly wary of the sector's rising capital expenditures—the funds poured into long-term assets such as data centers and computing hardware.
With both firms spending heavily to build out artificial intelligence infrastructure, market participants are questioning when these massive investments will translate into meaningful revenue and profit growth per CNBC. The steep drops in Amazon and Intel weighed heavily on market indices, showing how vulnerabilities among dominant technology leaders can rapidly dampen confidence across the broader industry.
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:
- Content delivery company Cloudflare (NYSE: NET) fell 12%. Is now the time to buy Cloudflare? Access our full analysis report here, it’s free.
- Content delivery company Fastly (NASDAQ: FSLY) fell 12.3%. Is now the time to buy Fastly? Access our full analysis report here, it’s free.
- Data infrastructure company Oracle (NYSE: ORCL) fell 5.3%. Is now the time to buy Oracle? Access our full analysis report here, it’s free.
- Developer operations company JFrog (NASDAQ: FROG) fell 8.8%. Is now the time to buy JFrog? Access our full analysis report here, it’s free.
- Identity management company Okta (NASDAQ: OKTA) fell 7.9%. Is now the time to buy Okta? Access our full analysis report here, it’s free.
Zooming in on Fastly (FSLY)
Fastly’s shares are extremely volatile and have had 81 moves greater than 5% over the last year. But moves this big are rare even for Fastly and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 11 days ago when the stock gained 2.6% on the news that retreating yields and dip-buying supported a relief rebound following the previous session's sharp drawdown. The bounce follows a pullback across cloud vendors, triggered by fears that aggressive artificial intelligence capital budgets are crowding out traditional software spending. Scrutiny escalated after CNBC reported that Anthropic generated $16.8 billion in third-quarter revenue, fueling concern that enterprise technology wallets are shifting toward foundation model providers at the expense of established business workflows.
Software valuations experience immediate multiple compression when sovereign borrowing benchmarks climb or budget allocations stall. With the 10-year U.S. Treasury yield receding, per CNBC reporting, lower discount rates offered tangible relief to high-multiple subscription models.
Fastly is up 121% since the beginning of the year, but at $22.53 per share, it is still trading 32.8% below its 52-week high of $33.50 from April 2026. Despite the year-to-date gain, investors who bought $1,000 worth of Fastly’s shares 5 years ago would now be looking at only $437.44.
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