What Happened?
A number of stocks fell in the afternoon session after President Trump threatened to increase import taxes on Chinese goods, reigniting trade war fears.
The threat was in response to China's move to restrict its exports of rare earth minerals, which are critical to high-tech manufacturing in the U.S. The unexpected announcement shattered a monthslong calm on Wall Street, sending major indices tumbling. The S&P 500 dropped around 1.3%, while the tech-heavy Nasdaq Composite fell 2.7%. Investors reacted by selling off stocks, particularly in the technology and retail sectors, amid concerns that escalating trade tensions could disrupt global supply chains and increase costs for companies.
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:
- Marketing Software company Upland Software (NASDAQ: UPLD) fell 5.3%. Is now the time to buy Upland Software? Access our full analysis report here, it’s free for active Edge members.
- Data Analytics company Health Catalyst (NASDAQ: HCAT) fell 4.9%. Is now the time to buy Health Catalyst? Access our full analysis report here, it’s free for active Edge members.
- Automation Software company SoundHound AI (NASDAQ: SOUN) fell 2.5%. Is now the time to buy SoundHound AI? Access our full analysis report here, it’s free for active Edge members.
- Finance and Accounting Software company BILL (NYSE: BILL) fell 2.6%. Is now the time to buy BILL? Access our full analysis report here, it’s free for active Edge members.
- Data Storage company DigitalOcean (NYSE: DOCN) fell 5.1%. Is now the time to buy DigitalOcean? Access our full analysis report here, it’s free for active Edge members.
Zooming In On Upland Software (UPLD)
Upland Software’s shares are extremely volatile and have had 62 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 17 days ago when the stock dropped 2.9% on the news that Federal Reserve Chair Jerome Powell delivered cautious remarks on the economy, spooking investors and pulling indexes back from record highs.
Speaking for the first time since the central bank's recent interest rate cut, Powell described the current economic landscape as a "challenging situation." He highlighted the difficult task of balancing a weakening labor market against persistent inflation risks. Powell also commented that equity prices appeared "fairly highly valued," adding to investor concerns and prompting profit-taking. The cautious tone from the Fed chair drove declines across major indexes, including the S&P 500 and the tech-heavy Nasdaq, as the market reassessed the path forward for monetary policy.
Upland Software is down 48.4% since the beginning of the year, and at $2.31 per share, it is trading 56.5% below its 52-week high of $5.31 from December 2024. Investors who bought $1,000 worth of Upland Software’s shares 5 years ago would now be looking at an investment worth $52.45.
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