What happened?
A number of stocks fell in the afternoon session after underwhelming earnings reports from tech giants Amazon and Intel (after mediocre earnings reports from Alphabet and ServiceNow the previous day) sparked widespread investor anxiety regarding aggressive artificial intelligence spending and sustained cash burn.
As reported by CNBC, disappointing quarterly reports from both companies triggered a broad slide across technology equities and hardware suppliers, overshadowing positive momentum in other areas of the market. Investors grew increasingly wary of the sector's rising capital expenditures—the funds poured into long-term assets such as data centers and computing hardware.
With both firms spending heavily to build out artificial intelligence infrastructure, market participants are questioning when these massive investments will translate into meaningful revenue and profit growth per CNBC. The steep drops in Amazon and Intel weighed heavily on market indices, showing how vulnerabilities among dominant technology leaders can rapidly dampen confidence across the broader industry.
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:
- Advertising software company Zeta Global (NYSE: ZETA) fell 6.1%. Is now the time to buy Zeta Global? Access our full analysis report here, it’s free.
- E-commerce software company Commerce (NASDAQ: CMRC) fell 6%. Is now the time to buy Commerce? Access our full analysis report here, it’s free.
Zooming in on Zeta Global (ZETA)
Zeta Global’s shares are extremely volatile and have had 50 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 3.8% on the news that software stocks extended gains as the broader stock market undergoes an overhaul regarding the future of the artificial intelligence trade. Repricing continued to unfold following the previous week’s sharp retreat in tech equities, when mounting financing hurdles weakened demand for physical artificial intelligence builders.
As reported by CNBC, high-growth software stocks are looking increasingly attractive as market participants rotate money out of the semiconductor sector and into the parts of the AI trade that they believe will outperform going forward. CNBC noted that this rotation is being driven by growing investor weariness that the broader market will face a challenging environment next year due to a ballooning U.S. fiscal deficit, higher inflation, and an anticipated deceleration in the massive AI infrastructure capital expenditure cycle.
Zeta Global is up 53.2% since the beginning of the year, but at $30.49 per share, it is still trading 10.6% below its 52-week high of $34.11 from October 2026. Investors who bought $1,000 worth of Zeta Global’s shares 5 years ago would now be looking at an investment worth $3,596.
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