What Happened?
A number of stocks fell in the afternoon session after Federal Reserve Chair Jerome Powell delivered cautious remarks on the economy, spooking investors and pulling indexes back from record highs.
Speaking for the first time since the central bank's recent interest rate cut, Powell described the current economic landscape as a "challenging situation." He highlighted the difficult task of balancing a weakening labor market against persistent inflation risks.
Powell also commented that equity prices appeared "fairly highly valued," adding to investor concerns and prompting profit-taking. The cautious tone from the Fed chair drove declines across major indexes, including the S&P 500 and the tech-heavy Nasdaq, as the market reassessed the path forward for monetary policy.
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:
- Endpoint Security company SentinelOne (NYSE: S) fell 3.4%. Is now the time to buy SentinelOne? Access our full analysis report here, it’s free.
- Advertising Software company PubMatic (NASDAQ: PUBM) fell 3.6%. Is now the time to buy PubMatic? Access our full analysis report here, it’s free.
Zooming In On PubMatic (PUBM)
PubMatic’s shares are very volatile and have had 25 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 7 days ago when the stock gained 3.1% on the news that the company launched a new AI-powered monetization platform designed to give publishers more control over their revenue, data, and demand.
The unified platform combines capabilities for automated revenue optimization, first-party data monetization, and direct access to media budgets. PubMatic's Co-Founder and CEO, Rajeev Goel, stated that "Media owners must embrace innovation now more than ever," emphasizing the platform's role in helping publishers gain insights to attract advertisers.
PubMatic is down 43.4% since the beginning of the year, and at $8.40 per share, it is trading 51% below its 52-week high of $17.14 from February 2025. Investors who bought $1,000 worth of PubMatic’s shares at the IPO in December 2020 would now be looking at an investment worth $285.23.
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