What Happened?

A number of stocks fell in the afternoon session after markets pulled back, reversing early gains, as investor sentiment remained cautious despite a softer-than-expected inflation reading. 

Stocks rose in the morning session after an unexpected drop in the Producer Price Index (PPI) for August signaled easing inflation and raised expectations for a potential Federal Reserve interest rate cut. The U.S. Bureau of Labor Statistics reported that the PPI, which measures wholesale prices, edged down 0.1% last month, contrary to analyst expectations for a 0.3% rise. This data gives the Federal Reserve more flexibility to consider lowering interest rates to stimulate the economy.

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:

• Communications Platform company Bandwidth (NASDAQ: BAND) fell 2.9%. Is now the time to buy Bandwidth? Access our full analysis report here, it’s free.
• Healthcare And Life Sciences Software company Veeva Systems (NYSE: VEEV) fell 3.2%. Is now the time to buy Veeva Systems? Access our full analysis report here, it’s free.
• Project Management Software company monday.com (NASDAQ: MNDY) fell 3.1%. Is now the time to buy monday.com? Access our full analysis report here, it’s free.
• Hospitality & Restaurant Software company Toast (NYSE: TOST) fell 3.6%. Is now the time to buy Toast? Access our full analysis report here, it’s free.
• Data Storage company Commvault (NASDAQ: CVLT) fell 4.3%. Is now the time to buy Commvault? Access our full analysis report here, it’s free.

Zooming In On Commvault (CVLT)

Commvault’s shares are quite volatile and have had 17 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 8 days ago when the stock dropped 5.5% on the news that the company announced its intention to offer $750 million in Convertible Senior Notes due 2030. 

This type of offering often raises concerns among investors about potential future share dilution, as the notes can be converted into the company's common stock, which would increase the total number of shares outstanding and reduce the ownership percentage of existing shareholders. The offering is being made to qualified institutional buyers. Commvault stated it plans to use a portion of the proceeds to buy back up to $125 million of its own shares and to fund capped call transactions, which are designed to reduce potential dilution from the conversion of the notes. The remaining proceeds are intended for general corporate purposes.

Commvault is up 16% since the beginning of the year, and at $176.45 per share, it is trading close to its 52-week high of $193.37 from July 2025. Investors who bought $1,000 worth of Commvault’s shares 5 years ago would now be looking at an investment worth $4,448.

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