What Happened?

A number of stocks fell in the afternoon session after investors took some profits off the table as markets awaited signals on future monetary policy from the Federal Reserve's Jackson Hole symposium later in the week. 

The downturn in the market was largely attributed to a significant sell-off in megacap tech and chipmaker shares. Nvidia, Advanced Micro Devices (AMD), and Broadcom all saw notable drops, dragging down the VanEck Semiconductor ETF. Other major tech-related companies like Tesla, Meta Platforms, and Netflix were also under pressure. A key reason for this trend is that much of the recent market gains have been concentrated in the "AI trade," which includes these large technology and semiconductor companies. So this could also mean that some investors are locking in some gains ahead of more definitive feedback from the Fed.

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 Storage company MongoDB (NASDAQ: MDB) fell 4%. Is now the time to buy MongoDB? Access our full analysis report here, it’s free.
• Project Management Software company Asana (NYSE: ASAN) fell 3.1%. Is now the time to buy Asana? Access our full analysis report here, it’s free.
• Data Storage company Snowflake (NYSE: SNOW) fell 3%. Is now the time to buy Snowflake? Access our full analysis report here, it’s free.

Zooming In On MongoDB (MDB)

MongoDB’s shares are very volatile and have had 27 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 gained 4.3% on the news that investment firm Citi added a 90-day positive catalyst watch on the software company, anticipating potential growth from upcoming events. Investment firm Citi placed an upside 90-day positive catalyst watch on the software company, pointing to several upcoming events that could boost the stock. Analyst Tyler Radke highlighted MongoDB's planned appearance at a conference on September 3 and an investor day on September 17 as potential drivers. The firm anticipates the company will provide updates on its artificial intelligence (AI) momentum and new financial targets at these events. This positive outlook is supported by Radke's "Buy" rating and a $405 price target, which suggests a significant potential return. The news builds on other recent positive developments, including the announcement of product innovations aimed at making it easier for customers to build AI applications.

MongoDB is down 10.9% since the beginning of the year, and at $218 per share, it is trading 37.7% below its 52-week high of $350.13 from December 2024. Investors who bought $1,000 worth of MongoDB’s shares 5 years ago would now be looking at an investment worth $1,025.

Unless you’ve been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) semiconductor stock benefiting from the rise of AI. Click here to access our free report on our favorite semiconductor growth story.