What Happened?
A number of stocks fell in the afternoon session after rising treasury yields and renewed Iran tensions hit the software sector.
The 10 year jumped to 4.4% as Trump rejected Iran's latest peace proposal, compressing the terminal value multiples (future cash flow discounted back to the present value) that high multiple SaaS names depend on. The real story was more thematic with 2026 being a difficult year for some software names as investors feared agentic AI would erode the traditional subscription model that powers enterprise software economics.
As a result, capital continued to flow into AI infrastructure names like Nvidia and Micron where capex is tangible and earnings visibility remained high. JP Morgan called the sell off "broken logic" while Morgan Stanley noted it was sentiment driven. However, until estimates stabilized, investors continued to grapple with uncertainty.
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:
- Video Conferencing company RingCentral (NYSE: RNG) fell 2.9%. Is now the time to buy RingCentral? Access our full analysis report here, it’s free.
- Vulnerability Management company Tenable (NASDAQ: TENB) fell 2.9%. Is now the time to buy Tenable? Access our full analysis report here, it’s free.
- E-commerce Software company Wix (NASDAQ: WIX) fell 3%. Is now the time to buy Wix? Access our full analysis report here, it’s free.
- Data Analytics company Samsara (NYSE: IOT) fell 3.1%. Is now the time to buy Samsara? Access our full analysis report here, it’s free.
- Data Storage company MongoDB (NASDAQ: MDB) fell 3%. Is now the time to buy MongoDB? Access our full analysis report here, it’s free.
Zooming In On Samsara (IOT)
Samsara’s shares are very volatile and have had 28 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 10 days ago when the stock gained 3.4% on the news that 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.
Samsara is down 14.7% since the beginning of the year, and at $28.93 per share, it is trading 39.4% below its 52-week high of $47.74 from May 2025. Investors who bought $1,000 worth of Samsara’s shares at the IPO in December 2021 would now be looking at an investment worth $1,171.
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