What happened?
A number of stocks fell in the morning session after software stocks extended the selloff from the previous session as investors continued to reprice valuations amid mounting artificial intelligence capital expenditure concerns and decelerating software bookings.
Oracle filed to raise $20 billion in debt and equity, reigniting concerns over soaring artificial intelligence spending and cash burn. The selloff deepened after quarterly reports from Alphabet and Amazon highlighted soaring data-center outlays that compressed free cash flows, as reported by Bloomberg. That spending concern triggered the tech-heavy Nasdaq's drop the previous week, cementing its steepest monthly decline in over a year, according to The Wall Street Journal.
Investors are increasingly demanding clear evidence that massive infrastructure outlays will translate into sustainable profits and robust revenue growth. Without immediate monetization from enterprise adoption, concerns over elevated sector valuations have deepened, leading to broad-based selling pressure across chipmakers, hardware providers, and cloud service operators.
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:
- Video conferencing company RingCentral (NYSE: RNG) fell 4.7%. Is now the time to buy RingCentral? Access our full analysis report here, it’s free.
- Data storage company Commvault (NASDAQ: CVLT) fell 3.8%. Is now the time to buy Commvault? Access our full analysis report here, it’s free.
- Content delivery company Fastly (NASDAQ: FSLY) fell 6.7%. Is now the time to buy Fastly? Access our full analysis report here, it’s free.
Zooming in on Fastly (FSLY)
Fastly’s shares are extremely volatile and have had 82 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.
Fastly is up 113% since the beginning of the year, but at $21.68 per share, it is still trading 35.3% 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 $439.48.
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