What Happened?

A number of stocks fell in the afternoon session after markets 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.

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:

• Video Conferencing company RingCentral (NYSE: RNG) fell 3.9%. Is now the time to buy RingCentral? Access our full analysis report here, it’s free for active Edge members.
• Marketing Software company Sprout Social (NASDAQ: SPT) fell 4.8%. Is now the time to buy Sprout Social? Access our full analysis report here, it’s free for active Edge members.
• Automation Software company Jamf (NASDAQ: JAMF) fell 4%. Is now the time to buy Jamf? Access our full analysis report here, it’s free for active Edge members.
• Video Conferencing company 8x8 (NASDAQ: EGHT) fell 4.9%. Is now the time to buy 8x8? Access our full analysis report here, it’s free for active Edge members.
• Project Management Software company monday.com (NASDAQ: MNDY) fell 5.3%. Is now the time to buy monday.com? Access our full analysis report here, it’s free for active Edge members.

Zooming In On monday.com (MNDY)

monday.com’s shares are very volatile and have had 29 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 15 days ago when the stock dropped 2.9% on the news that a regulatory filing signaled an insider's intent to sell a notable block of shares. 

A Form 144 was filed for a proposed sale of 7,000 ordinary shares, valued at approximately $1.3 million. Such filings are required when corporate insiders plan to sell company stock, and they can sometimes attract investor scrutiny. The document also revealed that the same seller had recently disposed of over 30,000 shares in the preceding months, generating gross proceeds of more than $8.3 million. This pattern of selling by a company insider may have raised concerns among investors about the stock's near-term outlook, contributing to the downward pressure on the share price.

monday.com is down 22.4% since the beginning of the year, and at $179.25 per share, it is trading 45.3% below its 52-week high of $327.92 from February 2025. Investors who bought $1,000 worth of monday.com’s shares at the IPO in June 2021 would now be looking at an investment worth $1,002.

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