What Happened?
A number of stocks jumped in the afternoon session after Guggenheim's John DiFucci upgraded both Salesforce and ServiceNow to Buy, arguing the AI-disruption fear that gutted the sector during the year had pushed valuations too low.
This was a valuation call from a skeptic, not an AI endorsement. DiFucci wrote he is "not upgrading because we see [ServiceNow] as an AI beneficiary," calling near-term AI monetization "unlikely to materialize" and AI risks "very real," while arguing the darkest scenario was already priced in (CRM at ~3.7x EV/recurring revenue; NOW's $125 target at 7.5x EV/NTM recurring revenue).
The read-through was what lifted the group. When a previously cautious, highly ranked analyst flips to Buy on the two enterprise-SaaS bellwethers purely on valuation, it signals the "SaaSpocalypse" repricing overshot, de-risking the whole complex and inviting bargain-hunting across peers. Oracle's ~2% bounce added an independent second leg, driven by inclusion on William Blair's July Analyst Conviction List, a new AI product, and oversold conditions after the previous disclosure of a $40 billion AI-infrastructure raise. Together they extended a multi-week recovery.
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:
- Data Analytics company Health Catalyst NASDAQ:HCAT jumped 6.4%. Is now the time to buy Health Catalyst?
- Advertising Software company PubMatic NASDAQ:PUBM jumped 5.1%. Is now the time to buy PubMatic?
- Design Software company PTC NASDAQ:PTC jumped 6.4%. Is now the time to buy PTC?
Zooming In On PTC (PTC)
PTC’s shares are not very volatile and have only had 7 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was about 2 months ago when the stock gained 8.9% on the news that the company reported strong first-quarter 2026 results that significantly beat analyst expectations for both revenue and profit.
The company posted revenue of $774.3 million and adjusted earnings per share (EPS) of $2.69, surpassing Wall Street's estimates by 8.6% and 27.5%, respectively. Strong billings, which grew 19.9% year-over-year, also provided a boost to investor sentiment. The positive reaction came despite a mixed report, as management slightly lowered its full-year adjusted EPS guidance. Additionally, the company's Annual Recurring Revenue (ARR), a key metric for software companies, missed analyst expectations. Investors, however, appeared to focus on the significant outperformance in the current quarter and the company's expanding operating margins.
PTC is down 29.1% since the beginning of the year, and at $120.59 per share, it is trading 44.3% below its 52-week high of $216.53 from August 2025. Investors who bought $1,000 worth of PTC’s shares 5 years ago would now be looking at only $843.43.
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