What Happened?
Shares of cloud communications provider 8x8 (NASDAQ: EGHT) fell 2% in the afternoon session after a broader market selloff that particularly impacted technology stocks.
The move was not driven by company-specific news but rather a widespread downturn on Wall Street. The tech-heavy Nasdaq 100 index slid 1.4%, closely mirroring 8x8's decline, while the S&P 500 fell nearly 1%. This selloff in the technology sector, which has been a strong performer, comes as the market braces for September, a month historically known for being the weakest for U.S. shares. The market downturn occurred even as new inflation data did little to change expectations for future Federal Reserve rate cuts.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy 8x8? Access our full analysis report here, it’s free.
What Is The Market Telling Us
8x8’s shares are extremely volatile and have had 44 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 dropped 3.2% on the news that investors took some profits off the table as markets awaited signals on future monetary policy from the Federal Reserve's Jackson Hole symposium later in the week. The downturn in the market was largely attributed to a significant sell-off in megacap tech and chipmaker shares. Nvidia, Advanced Micro Devices (AMD), and Broadcom all saw notable drops, dragging down the VanEck Semiconductor ETF. Other major tech-related companies like Tesla, Meta Platforms, and Netflix were also under pressure. A key reason for this trend is that much of the recent market gains have been concentrated in the "AI trade," which includes these large technology and semiconductor companies. So this could also mean that some investors are locking in some gains ahead of more definitive feedback from the Fed.
8x8 is down 25.4% since the beginning of the year, and at $1.99 per share, it is trading 42.8% 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 $117.59.
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