What Happened?
A number of stocks fell in the morning session after a broad sell-off swept through the software sector, driven by growing concerns about the impact of artificial intelligence. This led to institutional repositioning as traders pivot away from traditional SaaS providers in favor of companies with more defensible, AI-integrated moats. The tech-heavy Nasdaq Composite index declined by 0.8%, while the broader S&P 500 also slipped.
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:
- Project Management Software company Asana (NYSE:ASAN) fell 7.8%. Is now the time to buy Asana? Access our full analysis report here, it’s free.
- Data Storage company MongoDB (NASDAQ:MDB) fell 7.6%. Is now the time to buy MongoDB? Access our full analysis report here, it’s free.
- Cloud Monitoring company Datadog (NASDAQ:DDOG) fell 6.6%. Is now the time to buy Datadog? Access our full analysis report here, it’s free.
- Data Infrastructure company Elastic (NYSE:ESTC) fell 8%. Is now the time to buy Elastic? Access our full analysis report here, it’s free.
- Project Management Software company Atlassian (NASDAQ:TEAM) fell 9.3%. Is now the time to buy Atlassian? Access our full analysis report here, it’s free.
Zooming In On Atlassian (TEAM)
Atlassian’s shares are very volatile and have had 26 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 7 days ago when the stock dropped 4.4% on the news that reports revealed competitive pressures from a new artificial intelligence (AI) feature released by Anthropic. Anthropic's new feature, "Cowork," was built to be particularly good at task management. This development was viewed as a direct challenge to Atlassian, an enterprise software developer known for its own project and task management tools. The introduction of a powerful AI agent capable of performing similar functions raised concerns among investors about Atlassian's competitive position and future growth.
Atlassian is down 34.4% since the beginning of the year, and at $101.57 per share, it is trading 68.5% below its 52-week high of $322.94 from February 2025. Investors who bought $1,000 worth of Atlassian’s shares 5 years ago would now be looking at an investment worth $416.29.
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