What Happened?
A number of stocks fell in the afternoon session after 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.
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:
- Communications Platform company Twilio (NYSE:TWLO) fell 4.5%. Is now the time to buy Twilio? Access our full analysis report here, it’s free.
- Network Security company Zscaler (NASDAQ:ZS) fell 3.6%. Is now the time to buy Zscaler? Access our full analysis report here, it’s free.
- Data Storage company Snowflake (NYSE:SNOW) fell 4%. Is now the time to buy Snowflake? Access our full analysis report here, it’s free.
- Automation Software company UiPath (NYSE:PATH) fell 3.8%. Is now the time to buy UiPath? Access our full analysis report here, it’s free.
- Developer Operations company GitLab (NASDAQ:GTLB) fell 3.8%. Is now the time to buy GitLab? Access our full analysis report here, it’s free.
Zooming In On Twilio (TWLO)
Twilio’s shares are very volatile and have had 27 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 14 days ago when the stock dropped 9.3% on the news that 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.
Twilio is down 21.6% since the beginning of the year, and at $108.52 per share, it is trading 24.7% below its 52-week high of $144.14 from December 2025. Investors who bought $1,000 worth of Twilio’s shares 5 years ago would now be looking at an investment worth $263.61.
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