What Happened?
Shares of cloud communications provider 8x8 (NASDAQ:EGHT) jumped 43.8% in the afternoon session after the company reported strong fourth-quarter 2025 results that beat Wall Street's expectations and offered an optimistic outlook.
For the quarter ended December 31, 2025, the cloud communications provider announced revenue of $185.1 million, a 3.4% increase year-over-year. The company significantly beat profit expectations, posting non-GAAP earnings of $0.12 per share against estimates of $0.09. Management highlighted accelerating demand for its AI-driven customer experience tools, which contributed to the strong performance. Adding to the positive news, 8x8 also issued revenue guidance for the next quarter that was 3.2% above what analysts had projected, signaling confidence in its near-term outlook.
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What Is The Market Telling Us
8x8’s shares are extremely volatile and have had 46 moves greater than 5% over the last year. But moves this big are rare even for 8x8 and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was about 22 hours ago when the stock dropped 5.8% on the news that fears of disruption from artificial intelligence spooked investors, leading to a broad-based sell-off. The market witnessed a "basket-style reaction," a term for when investors reduce exposure to an entire segment without differentiating between individual company business models. The negative sentiment was widespread, pulling down all of the Magnificent Seven stocks and sending the S&P 500 Information Technology Sector down nearly 3%.
8x8 is up 26.7% since the beginning of the year, but at $2.40 per share, it is still trading 31% below its 52-week high of $3.47 from February 2025. Investors who bought $1,000 worth of 8x8’s shares 5 years ago would now be looking at an investment worth $68.92.
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