What Happened?

A number of stocks jumped in the afternoon session after solid economic data, including a beat on consumer confidence boosted sentiment. 

The positive reports fueled a "Turnaround Tuesday" relief rally across the market, with the technology sector among the leaders. The Conference Board's Consumer Confidence Index rose to 91.2 in February, indicating a more optimistic outlook from consumers about income and business conditions. 

Also, a recent announcement from Anthropic regarding new collaborative tools for its Claude AI agent software helped calm investor nerves. The company's move to expand its AI tools into sectors like human resources and investment banking signals a potential for partnership rather than replacement. This shift in sentiment was reflected in the market, with the iShares Expanded Tech-Software Sector ETF surging 2.4% as investors bought back into beaten-down software stocks.

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:

• Marketing Software company Sprout Social (NASDAQ: SPT) jumped 4.5%. Is now the time to buy Sprout Social? Access our full analysis report here, it’s free.
• E-commerce Software company Wix (NASDAQ: WIX) jumped 5.1%. Is now the time to buy Wix? Access our full analysis report here, it’s free.
• Data Infrastructure company Elastic (NYSE: ESTC) jumped 5.8%. Is now the time to buy Elastic? Access our full analysis report here, it’s free.
• Banking Software company nCino (NASDAQ: NCNO) jumped 4.9%. Is now the time to buy nCino? Access our full analysis report here, it’s free.
• Vulnerability Management company Tenable (NASDAQ: TENB) jumped 4.5%. Is now the time to buy Tenable? Access our full analysis report here, it’s free.

Zooming In On Elastic (ESTC)

Elastic’s shares are very volatile and have had 25 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 2.9% on the news that 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.

Elastic is down 22.6% since the beginning of the year, and at $56.19 per share, it is trading 51.7% below its 52-week high of $116.36 from February 2025. Investors who bought $1,000 worth of Elastic’s shares 5 years ago would now be looking at an investment worth $358.54.

While Wall Street chases Nvidia at all-time highs, an under-the-radar semiconductor supplier is dominating a critical AI component these giants can’t build without. Click here to access our full research report, it’s free.