What Happened?

A number of stocks fell in the afternoon session after fears of disruption from artificial intelligence spooked investors, leading to a broad-based sell-off. 

The market witnessed a "basket-style reaction," a term for when investors reduce exposure to an entire segment without differentiating between individual company business models. The negative sentiment was widespread, pulling down all of the Magnificent Seven stocks and sending the S&P 500 Information Technology Sector down nearly 3%.

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 7.9%. Is now the time to buy RingCentral? Access our full analysis report here, it’s free.
• Vulnerability Management company Tenable (NASDAQ: TENB) fell 9.3%. Is now the time to buy Tenable? Access our full analysis report here, it’s free.
• Healthcare And Life Sciences Software company Veeva Systems (NYSE: VEEV) fell 7.6%. Is now the time to buy Veeva Systems? Access our full analysis report here, it’s free.
• Payments Software company Flywire (NASDAQ: FLYW) fell 8.3%. Is now the time to buy Flywire? Access our full analysis report here, it’s free.
• Developer Operations company GitLab (NASDAQ: GTLB) fell 8.5%. Is now the time to buy GitLab? Access our full analysis report here, it’s free.

Zooming In On Tenable (TENB)

Tenable’s shares are not very volatile and have only had 9 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

The previous big move we wrote about was 5 days ago when the stock dropped 4.5% as 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.

Tenable is down 12.5% since the beginning of the year, and at $19.88 per share, it is trading 54.1% below its 52-week high of $43.28 from February 2025. Investors who bought $1,000 worth of Tenable’s shares 5 years ago would now be looking at an investment worth $425.79.

Microsoft, Alphabet, Coca-Cola, Monster Beverage—all began as under-the-radar growth stories riding a massive trend. We’ve identified the next one: a profitable AI semiconductor play Wall Street is still overlooking.Go here for access to our full report, it’s free.