What Happened?

A number of stocks jumped in the afternoon session after Nvidia CEO Jensen Huang dismissed fears that artificial intelligence would cannibalize the enterprise software sector. 

High-growth names like Zscaler (ZS) and CrowdStrike (CRWD) saw significant rebounds as investors reassessed the "AI headwind" narrative that had previously weighed on valuations. Huang's comments acted as a powerful catalyst, signaling that the intersection of generative AI and established software platforms is a symbiotic relationship rather than a zero-sum game. During a CNBC appearance, Huang argued that the market "got it wrong," specifically defending the indispensable role of platforms like ServiceNow. He emphasized that these companies are uniquely positioned to deploy fine-tuned AI agents that utilize their existing specialized tools.

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:

• Advertising Software company PubMatic (NASDAQ: PUBM) jumped 6%. Is now the time to buy PubMatic? Access our full analysis report here, it’s free.
• Design Software company Procore Technologies (NYSE: PCOR) jumped 5.1%. Is now the time to buy Procore Technologies? Access our full analysis report here, it’s free.
• Automation Software company Pegasystems (NASDAQ: PEGA) jumped 4.2%. Is now the time to buy Pegasystems? Access our full analysis report here, it’s free.
• Banking Software company nCino (NASDAQ: NCNO) jumped 4.5%. Is now the time to buy nCino? Access our full analysis report here, it’s free.
• HR Software company Asure Software (NASDAQ: ASUR) jumped 5.9%. Is now the time to buy Asure Software? Access our full analysis report here, it’s free.

Zooming In On PubMatic (PUBM)

PubMatic’s shares are very volatile and have had 29 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 9 days ago when the stock dropped 3.7% 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.

PubMatic is down 19.3% since the beginning of the year, and at $6.94 per share, it is trading 51.8% below its 52-week high of $14.39 from February 2025. Investors who bought $1,000 worth of PubMatic’s shares 5 years ago would now be looking at an investment worth $107.01.

The 1999 book Gorilla Game predicted Microsoft and Apple would dominate tech before it happened. Its thesis? Identify the platform winners early. Today, enterprise software companies embedding generative AI are becoming the new gorillas. Click here for access to our special report that reveals one profitable leader already riding this wave, it’s free.