What Happened?
A number of stocks jumped in the afternoon session after Guggenheim's John DiFucci upgraded both Salesforce and ServiceNow to Buy, arguing the AI-disruption fear that gutted the sector during the year had pushed valuations too low.
This was a valuation call from a skeptic, not an AI endorsement. DiFucci wrote he is "not upgrading because we see [ServiceNow] as an AI beneficiary," calling near-term AI monetization "unlikely to materialize" and AI risks "very real," while arguing the darkest scenario was already priced in (CRM at ~3.7x EV/recurring revenue; NOW's $125 target at 7.5x EV/NTM recurring revenue).
The read-through was what lifted the group. When a previously cautious, highly ranked analyst flips to Buy on the two enterprise-SaaS bellwethers purely on valuation, it signals the "SaaSpocalypse" repricing overshot, de-risking the whole complex and inviting bargain-hunting across peers. Oracle's ~2% bounce added an independent second leg, driven by inclusion on William Blair's July Analyst Conviction List, a new AI product, and oversold conditions after the previous disclosure of a $40 billion AI-infrastructure raise. Together they extended a multi-week recovery.
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:
- Data Analytics company Domo (NASDAQ: DOMO) jumped 11.4%. Is now the time to buy Domo? Access our full analysis report here, it’s free.
- Data Analytics company Samsara (NYSE: IOT) jumped 9.3%. Is now the time to buy Samsara? Access our full analysis report here, it’s free.
- Vulnerability Management company Rapid7 (NASDAQ: RPD) jumped 10.9%. Is now the time to buy Rapid7? Access our full analysis report here, it’s free.
Zooming In On Domo (DOMO)
Domo’s shares are extremely volatile and have had 67 moves greater than 5% over the last year. But moves this big are rare even for Domo and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 5 days ago when the stock gained 20.1% on the news that the resignation of its Chief Technology Officer fueled speculation about a potential sale, as the company confirmed it is in "advanced negotiations" for a strategic transaction.
The company announced that Chief Technology Officer Daren Thayne will resign effective July 10. Notably, Domo stated it does not plan an immediate replacement "in light of advanced negotiations around a potential transaction." This development led investors to believe a buyout could be near. The rally marks a sharp reversal for the stock, which plummeted earlier in the month after reporting a year-over-year revenue decline and missing analyst estimates for its first quarter.
Domo is down 59% since the beginning of the year, and at $3.41 per share, it is trading 81.3% below its 52-week high of $18.20 from September 2025. Investors who bought $1,000 worth of Domo’s shares 5 years ago would now be looking at only $42.41.
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