What Happened?

A number of stocks fell in the afternoon session after markets pulled back with the decline concentrated in the tech space as investors engaged in profit-taking following a robust week that saw the S&P 500 hit a new record. 

Adding to the pressure, new inflation data, specifically the Core PCE, showed an acceleration in July, signaling that rising prices remain a risk despite being in line with expectations. This confluence of factors, including market highs heading into a historically weak September, led to a pullback, with the Nasdaq Composite shedding 1.15%. While the Federal Reserve has hinted at potential rate cuts, the focus on inflation and the jobs market continues to influence investor sentiment.

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:

• Construction and Maintenance Services company Orion (NYSE: ORN) fell 3.1%. Is now the time to buy Orion? Access our full analysis report here, it’s free.
• Renewable Energy company Blink Charging (NASDAQ: BLNK) fell 5.7%. Is now the time to buy Blink Charging? Access our full analysis report here, it’s free.
• Enterprise Networking company Applied Digital (NASDAQ: APLD) fell 3.9%. Is now the time to buy Applied Digital? Access our full analysis report here, it’s free.
• Data Analytics company Domo (NASDAQ: DOMO) fell 6.4%. Is now the time to buy Domo? Access our full analysis report here, it’s free.
• Apparel Retailer company Urban Outfitters (NASDAQ: URBN) fell 3.4%. Is now the time to buy Urban Outfitters? Access our full analysis report here, it’s free.

Zooming In On Domo (DOMO)

Domo’s shares are extremely volatile and have had 30 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 2 days ago when the stock gained 8.4% on the news that the company announced it signed a strategic collaboration agreement with Amazon Web Services (AWS) to accelerate the adoption of generative artificial intelligence solutions. 

The partnership is designed to help mutual customers of both companies build AI-powered solutions by leveraging Domo's AI platform and AWS's cloud infrastructure. The collaboration specifically centers on Domo AI, the company's suite of AI tools that includes features like natural language querying and automated insights. This positive development follows other recent good news for the company. Just a day prior, analysts at TD Cowen upgraded Domo's stock rating to Buy from Hold and significantly raised their price target, citing a belief that the company is "turning the corner" on key strategic initiatives that could drive sustained growth.

Domo is up 107% since the beginning of the year, but at $14.69 per share, it is still trading 16.4% below its 52-week high of $17.57 from August 2025. Investors who bought $1,000 worth of Domo’s shares 5 years ago would now be looking at an investment worth $360.76.

Today’s young investors won’t have read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next.