What Happened?
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:
- Advertising Software company Zeta Global (NYSE: ZETA) fell 9.6%. Is now the time to buy Zeta Global? Access our full analysis report here, it’s free.
- Advertising Software company The Trade Desk (NASDAQ: TTD) fell 9.6%. Is now the time to buy The Trade Desk? Access our full analysis report here, it’s free.
- E-commerce Software company Wix (NASDAQ: WIX) fell 8.1%. Is now the time to buy Wix? Access our full analysis report here, it’s free.
- Sales Software company Salesforce (NYSE: CRM) fell 7.8%. Is now the time to buy Salesforce? Access our full analysis report here, it’s free.
- Finance and Accounting Software company Workday (NASDAQ: WDAY) fell 8.7%. Is now the time to buy Workday? Access our full analysis report here, it’s free.
Zooming In On The Trade Desk (TTD)
The Trade Desk’s shares are very volatile and have had 28 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 7 days ago when the stock dropped 4.5% on the news that the stock's momentum weakened as the company announced the resignation of its Chief Financial Officer, Alex Kayyal, less than six months in the role. The sudden departure of a key executive likely raised investor concerns. The company appointed longtime executive and Chief Accounting Officer Tahnil Davis as the interim CFO.
The Trade Desk is down 29% since the beginning of the year, and at $26.74 per share, it is trading 78.2% below its 52-week high of $122.54 from February 2025. Investors who bought $1,000 worth of The Trade Desk’s shares 5 years ago would now be looking at an investment worth $318.60.
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