What Happened?
Shares of internet of Things company Samsara (NYSE: IOT) fell 6% in the afternoon session after an analyst at Piper Sandler lowered the company's price target to $47 from $53, citing a more cautious outlook. While the investment firm maintained its "Overweight" rating, the target reduction added to existing investor worries. A recent letter from the Artisan Mid Cap Fund highlighted that investors focused on management's comments regarding contract delays tied to the macroeconomic environment. These concerns lingered from a previous stock dip in June, when the company's forward-looking guidance underwhelmed the market, overshadowing first-quarter results that beat expectations.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Samsara? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Samsara’s shares are very volatile and have had 21 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 6 days ago when the stock dropped 5% on the news that the White House announced a new round of steep global tariffs, sparking concerns of a trade war and its impact on the U.S. and global economies. This move creates significant uncertainty for businesses and investors. The new tariffs, with rates of up to 41% on imports from 68 countries and the European Union, prompted a broad market sell-off, with the tech-heavy Nasdaq index showing notable weakness.
Adding to the bearish sentiment was a weaker-than-expected July jobs report, which revealed that employers created only 73,000 jobs, far below economists' expectations. This combination of trade fears and signs of a slowing labor market has created a "risk-off" environment, leading investors to pull back from growth-oriented sectors like software and technology.
Samsara is down 21.6% since the beginning of the year, and at $34.48 per share, it is trading 43.4% below its 52-week high of $60.96 from February 2025. Investors who bought $1,000 worth of Samsara’s shares at the IPO in December 2021 would now be looking at an investment worth $1,396.
Today’s young investors won’t have read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next.
