What Happened?
A number of stocks jumped in the afternoon session after Nvidia CEO Jensen Huang dismissed fears that artificial intelligence would cannibalize the enterprise software sector.
High-growth names like Zscaler (ZS) and CrowdStrike (CRWD) saw significant rebounds as investors reassessed the "AI headwind" narrative that had previously weighed on valuations. Huang's comments acted as a powerful catalyst, signaling that the intersection of generative AI and established software platforms is a symbiotic relationship rather than a zero-sum game. During a CNBC appearance, Huang argued that the market "got it wrong," specifically defending the indispensable role of platforms like ServiceNow. He emphasized that these companies are uniquely positioned to deploy fine-tuned AI agents that utilize their existing specialized tools.
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:
- Automation Software company SoundHound AI (NASDAQ: SOUN) jumped 3.6%. Is now the time to buy SoundHound AI? Access our full analysis report here, it’s free.
- HR Software company Paychex (NASDAQ: PAYX) jumped 3.4%. Is now the time to buy Paychex? Access our full analysis report here, it’s free.
- Advertising Software company LiveRamp (NYSE: RAMP) jumped 3.8%. Is now the time to buy LiveRamp? Access our full analysis report here, it’s free.
- Network Security company Palo Alto Networks (NASDAQ: PANW) jumped 3.8%. Is now the time to buy Palo Alto Networks? Access our full analysis report here, it’s free.
- Banking Software company Q2 Holdings (NYSE: QTWO) jumped 3%. Is now the time to buy Q2 Holdings? Access our full analysis report here, it’s free.
Zooming In On Palo Alto Networks (PANW)
Palo Alto Networks’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 17 days ago when the stock gained 4.6% on the news that analysts suggested that the recent "SaaSpocalypse" sell-off had pushed valuations into deeply oversold territory, sparking a wave of opportunistic buying. While the sector had been hammered in early 2026 by fears that autonomous AI agents would replace traditional seat-based subscriptions, institutional investors began rotating back into "sticky" incumbents. This shift was fueled by a Barclays report arguing that corporate transitions away from legacy systems take years, not weeks, providing a protective moat for established providers in compliance and governance.
Palo Alto Networks is down 16.5% since the beginning of the year, and at $149.74 per share, it is trading 32.4% below its 52-week high of $221.38 from October 2025. Investors who bought $1,000 worth of Palo Alto Networks’s shares 5 years ago would now be looking at an investment worth $2,507.
Microsoft, Alphabet, Coca-Cola, Monster Beverage—all began as under-the-radar growth stories riding a massive trend. We’ve identified the next one: a profitable AI semiconductor play Wall Street is still overlooking.Go here for access to our full report, it’s free.
