What Happened?
A number of stocks jumped in the afternoon session after blockbuster quarterly results from tech titans Apple and Amazon boosted investor confidence, supported by impressive earnings from key cloud and crypto leaders, Cloudflare and Coinbase.
Amazon's shares surged after reporting that its cloud computing division, Amazon Web Services (AWS), saw revenue jump 20% year-over-year to $33 billion. This accelerated growth is largely attributed to the high demand for computing power required for artificial intelligence applications. Apple also contributed to the positive sentiment, topping its own quarterly estimates and forecasting a record-breaking holiday quarter. The strong performance from these industry leaders has lifted the broader market.
Impressive results from key cloud and crypto leaders, Cloudflare and Coinbase strongly supported the broader tech momentum. Cloudflare reported a "beat and raise" quarter with revenue soaring 30.7% year-over-year to $562 million and billings jumping nearly 40%, signaling strong future growth. Its non-GAAP operating margin expanded to 15.3%, and Free Cash Flow grew by nearly 60%, confirming management's efficient execution, leading the company to raise its full-year EPS guidance. Concurrently, Coinbase's third-quarter results also significantly topped estimates, driven by better-than-expected trading revenue and the increasing adoption of its stablecoin, USDC. The company reported $1.87 billion in revenue and an adjusted EPS of $1.44, while its strategic acquisition of Deribit advanced its "Everything Exchange" vision, resulting in over $840 billion in derivatives trading volume and aggressive expansion across the crypto market.
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:
- Project Management Software company Atlassian (NASDAQ: TEAM) jumped 5%. Is now the time to buy Atlassian? Access our full analysis report here, it’s free for active Edge members.
- E-commerce Software company GoDaddy (NYSE: GDDY) jumped 3.8%. Is now the time to buy GoDaddy? Access our full analysis report here, it’s free for active Edge members.
- Lending Software company Upstart (NASDAQ: UPST) jumped 4.7%. Is now the time to buy Upstart? Access our full analysis report here, it’s free for active Edge members.
- Design Software company Unity (NYSE: U) jumped 3.2%. Is now the time to buy Unity? Access our full analysis report here, it’s free for active Edge members.
- Data Analytics company Amplitude (NASDAQ: AMPL) jumped 3.9%. Is now the time to buy Amplitude? Access our full analysis report here, it’s free for active Edge members.
Zooming In On Atlassian (TEAM)
Atlassian’s shares are very volatile and have had 23 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 10 days ago when the stock gained 5.9% on the news that it completed the acquisition of The Browser Company of New York Inc., the company behind the Dia and Arc browsers.
Atlassian, a major provider of team collaboration software, stated the goal of the acquisition was to reimagine the browser for knowledge workers in the era of artificial intelligence. The companies intended to combine Atlassian's expertise in how people work with The Browser Company's skills in building browsers. The plan was to create a new browser designed specifically for work, addressing the view that existing browsers were built for browsing, not the demands of modern work that involve many software apps. This new browser aimed to help employees connect apps, tabs, and conversations while protecting corporate data.
Atlassian is down 31.8% since the beginning of the year, and at $165.46 per share, it is trading 48.8% below its 52-week high of $322.94 from February 2025. Investors who bought $1,000 worth of Atlassian’s shares 5 years ago would now be looking at an investment worth $897.28.
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