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New: Instantly spot drawdowns, dips, insider moves, and breakout themes across Maps and Screener.
A number of stocks fell in the afternoon session after fears of disruption from artificial intelligence spooked investors, leading to a broad-based sell-off. The market witnessed a "basket-style reaction," a term for when investors reduce exposure to an entire segment without differentiating between individual company business models. The negative sentiment was widespread, pulling down all of the Magnificent Seven stocks and sending the S&P 500 Information Technology Sector down nearly 3%.
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:
Fastly’s shares are extremely volatile and have had 36 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 5 days ago when the stock dropped 5.3% on the news that a broad sell-off in the software sector was triggered by mixed earnings from industry leaders SAP and ServiceNow.
The negative sentiment across the industry was sparked after SAP's cloud backlog and its cloud revenue outlook fell short of some forecasts. Similarly, ServiceNow's stock dropped despite reporting better-than-expected results, fueling concerns that rising AI-related costs could pressure profits for enterprise software companies. The news sparked broader fears that AI was transforming the sector faster than companies could capitalize on it, leading the S&P 500 Software and Services Index to fall.
Fastly is down 14.7% since the beginning of the year, and at $8.70 per share, it is trading 29.5% below its 52-week high of $12.34 from November 2025. Investors who bought $1,000 worth of Fastly’s shares 5 years ago would now be looking at an investment worth $79.17.
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