What Happened?
A number of stocks jumped in the morning session after strong earnings and upbeat forecasts from several peers boosted the broader software sector.
The gains appeared driven by positive sentiment across the software-as-a-service (SaaS) space. For instance, enterprise software maker Atlassian saw its shares surge after lifting its annual forecast, which in turn lifted peers like Salesforce and ServiceNow.
Similarly, Twilio's stock jumped after it reported first-quarter revenue that beat estimates and raised its own forecast, with its CEO highlighting artificial intelligence as a catalyst. This positive news from peers helped create a favorable environment for software stocks, which some strategists noted had been underperforming the broader market and were potentially positioned for a comeback.
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 Infrastructure company Elastic (NYSE: ESTC) jumped 4.4%. Is now the time to buy Elastic? Access our full analysis report here, it’s free.
- Tax Software company BlackLine (NASDAQ: BL) jumped 4.7%. Is now the time to buy BlackLine? Access our full analysis report here, it’s free.
- Content Delivery company Fastly (NASDAQ: FSLY) jumped 4.7%. Is now the time to buy Fastly? Access our full analysis report here, it’s free.
Zooming In On Fastly (FSLY)
Fastly’s shares are extremely volatile and have had 55 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 11 days ago when the stock gained 3.6% on the news that investors continued to buy the dip despite renewed geopolitical jitters as the U.S.-Iran ceasefire came under doubt following the seizure of the Iranian vessel Touska.
While the fragile peace remained in question ahead of the ceasefire deadline later in the week, the software sector rebounded from a harsh "valuation reset" catalysed by AI fears. High-growth names like Datadog and ServiceNow led the charge as markets continued to decouple from Middle Eastern energy volatility. This resilience reflected a growing conviction that enterprise software remains a core structural winner, regardless of short-term macro turbulence.
Fastly is up 170% since the beginning of the year, but at $27.50 per share, it is still trading 17.9% below its 52-week high of $33.50 from April 2026. Despite the year-to-date gain, investors who bought $1,000 worth of Fastly’s shares 5 years ago would now be looking at only $445.58.
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