What Happened?
A number of stocks jumped in the afternoon session after confidence in the artificial intelligence market was renewed, pushing both the S&P 500 and Nasdaq to new all-time intraday highs.
The rebound was led by chipmaker Nvidia, whose shares rose nearly 2% after its CEO confirmed that demand for computing has "gone up substantially" in recent months. These comments helped reassure the market that the AI boom is supported by genuine demand, calming fears that were sparked a day earlier by a report questioning the profitability of Oracle's cloud business. The rally was strong enough to put the information technology sector on pace for a fresh closing high. This upward momentum occurred despite potential headwinds from an ongoing U.S. government shutdown, which entered its second week.
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 Analytics company Samsara (NYSE: IOT) jumped 3.2%. Is now the time to buy Samsara? Access our full analysis report here, it’s free for active Edge members.
- Data Storage company MongoDB (NASDAQ: MDB) jumped 3.1%. Is now the time to buy MongoDB? Access our full analysis report here, it’s free for active Edge members.
- Network Security company Palo Alto Networks (NASDAQ: PANW) jumped 3%. Is now the time to buy Palo Alto Networks? Access our full analysis report here, it’s free for active Edge members.
- Project Management Software company monday.com (NASDAQ: MNDY) jumped 3.9%. Is now the time to buy monday.com? Access our full analysis report here, it’s free for active Edge members.
- Developer Operations company GitLab (NASDAQ: GTLB) jumped 2.8%. Is now the time to buy GitLab? Access our full analysis report here, it’s free for active Edge members.
Zooming In On monday.com (MNDY)
monday.com’s shares are extremely volatile and have had 30 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 1 day ago when the stock dropped 5.3% on the news that tech stocks pulled back as a report raised concerns about artificial intelligence demand and profitability.
Oracle shares lost more than 5% following news of its cloud business generating lighter margins than expected. According to internal documents cited in the report, the gross profit margin for this business was only 14%, a figure much lower than what analysts had expected. This suggested that the high costs of running the advanced chip infrastructure were weighing on profitability. Compounding these worries was the ongoing U.S. government shutdown, in its second week, with no clear resolution in sight from Washington. These updates drove investors away from riskier assets and towards safe havens, a trend highlighted by gold futures hitting a record $4,000 per ounce for the first time.
monday.com is down 19.8% since the beginning of the year, and at $185.26 per share, it is trading 43.5% below its 52-week high of $327.92 from February 2025. Investors who bought $1,000 worth of monday.com’s shares at the IPO in June 2021 would now be looking at an investment worth $1,036.
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