What Happened?
A number of stocks jumped in the afternoon session after Treasury yields cooled and risk-on rotation lifted AI-linked growth names, helping the SaaS sector recover from the previous day's Intuit-driven sell-off.
SaaS companies (Salesforce, ServiceNow, Workday, Snowflake, MongoDB, Datadog) are the textbook example of long-duration cash flows: they earn revenue over multi-year contracts with high renewal rates, which makes them extremely sensitive to the discount rate.
A ten-basis-point drop in the 10-year yield can lift SaaS valuations 5-10% by itself, because these stocks trade on EV/forward-revenue multiples that move directly with rates. The combination of cooling yields and Iran peace progress also calmed fears that AI commoditization (yesterday's Intuit thesis) is universal across SaaS. Investors appeared to be sifting the market for SaaS companies whose moats AI extends, a healthier setup than the previous day's blanket sell-off.
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 Braze (NASDAQ: BRZE) jumped 3.5%. Is now the time to buy Braze? Access our full analysis report here, it’s free.
- Developer Operations company GitLab (NASDAQ: GTLB) jumped 3.8%. Is now the time to buy GitLab? Access our full analysis report here, it’s free.
- Vertical Software company Manhattan Associates (NASDAQ: MANH) jumped 3.1%. Is now the time to buy Manhattan Associates? Access our full analysis report here, it’s free.
Zooming In On GitLab (GTLB)
GitLab’s shares are extremely volatile and have had 37 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 4 days ago when the stock gained 4.8% on the news that investor confidence rebounded as markets softened their view on the existential threat AI poses to traditional software companies.
After a period of significant underperformance, dubbed the "SaaS Rout of 2026," where software stocks traded at a discount to the S&P 500, the prevailing fear that AI would completely disrupt and replace traditional Software-as-a-Service (SaaS) companies began to subside.
Experts noted that these companies possess significant advantages, including established enterprise relationships, vast amounts of proprietary data, and deep integration into customer workflows, which AI is unlikely to erase overnight. This changing perspective suggests a potential re-rating for the sector as investors realize these companies may be well-positioned to integrate and leverage AI rather than be replaced by it.
GitLab is down 26.5% since the beginning of the year, and at $26.60 per share, it is trading 47.9% below its 52-week high of $51.04 from November 2025. Investors who bought $1,000 worth of GitLab’s shares at the IPO in October 2021 would now be looking at an investment worth $256.04.
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