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:

• Content Delivery company Fastly (NYSE: FSLY) jumped 3.3%. Is now the time to buy Fastly? Access our full analysis report here, it’s free for active Edge members.
• Data Infrastructure company Elastic (NYSE: ESTC) jumped 3.8%. Is now the time to buy Elastic? Access our full analysis report here, it’s free for active Edge members.
• Advertising Software company LiveRamp (NYSE: RAMP) jumped 3.5%. Is now the time to buy LiveRamp? Access our full analysis report here, it’s free for active Edge members.
• Healthcare And Life Sciences Software company Doximity (NYSE: DOCS) jumped 3.2%. Is now the time to buy Doximity? Access our full analysis report here, it’s free for active Edge members.
• Endpoint Security company SentinelOne (NYSE: S) jumped 4.3%. Is now the time to buy SentinelOne? Access our full analysis report here, it’s free for active Edge members.

Zooming In On SentinelOne (S)

SentinelOne’s shares are quite volatile and have had 18 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 4.6% after 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.

SentinelOne is down 20.6% since the beginning of the year, and at $17.92 per share, it is trading 37.5% below its 52-week high of $28.68 from December 2024. Investors who bought $1,000 worth of SentinelOne’s shares at the IPO in June 2021 would now be looking at an investment worth $421.69.

Do you want to know what moves the business you care about? Add them to your StockStory watchlist and every time a stock significantly moves, we provide you with a timely explanation straight to your inbox. It’s free for active Edge members and will only take you a second.