What Happened?
A number of stocks jumped in the afternoon session after a drop in Treasury yields and growing concerns over the artificial intelligence investment cycle improved the market's appetite for enterprise software.
Global chipmakers suffered a sharp selloff tied to anxieties over lofty valuations, the sustainability of AI infrastructure spending, and intensifying competitive threats from China. Crucially, the decline in interest rates provided a macro tailwind for long-duration Software-as-a-Service valuations, acting as a catalyst for the software sector's rebound.
Alongside the relief from lower rates, software appeared to benefit from capital reallocation. As portfolio managers trim their chip exposure and lock in profits, they are likely to seek refuge in other sectors, especially established enterprise names. With the top 25 semiconductor and hardware companies hitting a combined market capitalization of approximately $22 trillion, even a fractional shift from this group can move the needle for software equities. Consequently, the sector experienced a broad lift, with many enterprise firms posting gains.
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:
- Project Management Software company Asana (NYSE: ASAN) jumped 6.5%. Is now the time to buy Asana? Access our full analysis report here, it’s free.
- HR Software company Paycom (NYSE: PAYC) jumped 7.2%. Is now the time to buy Paycom? Access our full analysis report here, it’s free.
- Vertical Software company Bentley Systems (NASDAQ: BSY) jumped 6.2%. Is now the time to buy Bentley Systems? Access our full analysis report here, it’s free.
- Cloud Monitoring company PagerDuty (NYSE: PD) jumped 6.1%. Is now the time to buy PagerDuty? Access our full analysis report here, it’s free.
- Marketing Software company Upland Software (NASDAQ: UPLD) jumped 10.5%. Is now the time to buy Upland Software? Access our full analysis report here, it’s free.
Zooming In On Upland Software (UPLD)
Upland Software’s shares are extremely volatile and have had 72 moves greater than 5% over the last year. But moves this big are rare even for Upland Software and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 13 days ago when the stock gained 9.5% as a soft Producer Price Index (PPI) print reassured investors, countering fears of an industry-wide budget squeeze sparked by IBM a day earlier.
June wholesale inflation fell 0.3% against expectations for a flat reading, layering on top of the previous session's surprisingly sharp 0.4% decline in consumer prices. This consecutive confirmation of cooling inflation shifted market focus away from IBM's warning that clients are engaged in "capex reprioritization"—exhausting their IT budgets to secure supply-constrained AI servers and high-bandwidth memory instead of software. Lower inflation data directly reduces Treasury yields by taking pressure off the Federal Reserve to hold interest rates high. This provides a mechanical valuation lift to growth stocks, whose valuations rely heavily on future cash flows.
Upland Software is up 226% since the beginning of the year, but at $4.89 per share, it is still trading 12% below its 52-week high of $5.55 from July 2026. Despite the year-to-date gain, investors who bought $1,000 worth of Upland Software’s shares 5 years ago would now be looking at only $131.60.
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