What Happened?
A number of stocks fell in the afternoon session after investor fears over artificial intelligence disrupting the software industry sparked a broad sell-off. The anxiety stemmed from the rapid adoption of new 'agentic AI' tools, which some investors believed could dismantle traditional Software-as-a-Service (SaaS) business models. This 'AI Panic' led to indiscriminate selling across the sector. The market move reflected growing concerns about the downside of the AI boom for established software 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:
- Gig Economy company Angi (NASDAQ:ANGI) fell 2.3%. Is now the time to buy Angi? Access our full analysis report here, it’s free.
- Gig Economy company Fiverr (NYSE:FVRR) fell 7.3%. Is now the time to buy Fiverr? Access our full analysis report here, it’s free.
Zooming In On Fiverr (FVRR)
Fiverr’s shares are quite volatile and have had 19 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 28 days ago when the stock dropped 4.3% on the news that the U.S. announced potential tariffs on several European countries.
The sell-off was a reaction to news that the White House planned to impose a 10% tariff on imports from eight European nations, including France, Germany, and the United Kingdom, starting February 1. Reports indicated the tariffs were intended to pressure Denmark over the potential sale of Greenland to the U.S. and could rise to 25% if a deal was not reached. The announcement caused a significant downturn in U.S. stocks, with the S&P 500 and Dow Jones falling more than 1.4% as investors returned from a holiday weekend and reacted to the heightened trade uncertainty. The downturn was further exacerbated by a spike in Treasury yields. Higher rates particularly hurt growth stocks such as tech names since investors must discount financials further out in the future back to the present.
Fiverr is down 32.7% since the beginning of the year, and at $13.25 per share, it is trading 60.8% below its 52-week high of $33.78 from June 2025. Investors who bought $1,000 worth of Fiverr’s shares 5 years ago would now be looking at an investment worth $43.25.
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