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:

• Compliance Software company Workiva (NYSE: WK) fell 9.1%. Is now the time to buy Workiva? Access our full analysis report here, it’s free.
• Network Security company Zscaler (NASDAQ: ZS) fell 7.1%. Is now the time to buy Zscaler? Access our full analysis report here, it’s free.
• E-commerce Software company Commerce (NASDAQ: CMRC) fell 8.2%. Is now the time to buy Commerce? Access our full analysis report here, it’s free.
• Document Management company Box (NYSE: BOX) fell 7.1%. Is now the time to buy Box? Access our full analysis report here, it’s free.
• Advertising Software company LiveRamp (NYSE: RAMP) fell 8.3%. Is now the time to buy LiveRamp? Access our full analysis report here, it’s free.

Zooming In On Workiva (WK)

Workiva’s shares are somewhat volatile and have had 12 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 28 days ago when the stock gained 2.9% on the news that a broader market rally drove investor optimism in artificial intelligence and big tech stocks. The S&P 500, Dow Jones, and Nasdaq all pushed higher, approaching record levels set late last year. Much of the positive momentum was linked to the technology sector, with a particular focus on companies advancing artificial intelligence, a key theme at the annual CES trade show in Las Vegas. This continued a powerful trend from 2025, when AI-related developments were a primary catalyst for the market's bull run. The upbeat sentiment was further supported by hopes for easier monetary policy from the Federal Reserve following a weaker-than-expected US Services PMI reading.

Workiva is down 16.5% since the beginning of the year, and at $69.32 per share, it is trading 32.8% below its 52-week high of $103.18 from February 2025. Investors who bought $1,000 worth of Workiva’s shares 5 years ago would now be looking at an investment worth $673.60.

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