Software stocks fell across the board on Friday, October 30, as the selloff that hit the biggest spenders on artificial intelligence spread to the companies that sell software to everyone. Datadog (Nasdaq: DDOG) closed down 11.5% and Cloudflare (NYSE: NET) 9.5%, according to Nasdaq's closing price data, and all ten software stocks in a SaasBuzz count of the week's closes ended the day lower.
The selling started with the spenders. Alphabet fell 12.6% on Thursday, its worst day since 2004, after its capital spending outran its operating cash, as SaasBuzz's analysis of Alphabet's selloff showed, and on Friday Intel had its worst day since the 1970s, CNBC reported. Investors "fretted about whether the industry's debt-fueled spending spree still justified such high share prices," The New York Times reported on Friday.
Software had already taken its own hit on Thursday, when ServiceNow (NYSE: NOW) fell 26.9% and Fortinet (Nasdaq: FTNT) 20.1% after their quarterly outlooks disappointed investors. Friday's drop came on top of that.
Ten software stocks, Friday and the week
SaasBuzz measured ten software stocks named in the week's coverage, and the iShares Expanded Tech-Software Sector ETF (IGV), from Nasdaq's closing prices.
Stock | Friday | Week |
|---|---|---|
Datadog | -11.5% | -12.7% |
Cloudflare | -9.5% | -13.8% |
MongoDB | -8.3% | -4.9% |
Snowflake | -7.5% | -6.2% |
F5 | -6.9% | -25.7% |
Oracle | -6.4% | +3.6% |
Okta | -6.1% | -2.3% |
JFrog | -4.5% | -6.2% |
ServiceNow | -4.1% | -33.9% |
Fortinet | -2.2% | -24.4% |
IGV (ETF) | -3.4% | -5.6% |
Source: SaasBuzz calculation from Nasdaq's daily closing prices, October 23 to October 30, 2026. Friday is the change from Thursday's close; week is the change from the close on October 23.
The ten fell 12.6% on average for the week. The three biggest weekly losses came from the companies' own results. F5 (Nasdaq: FFIV) fell 20.4% on October 28 after its fiscal 2027 outlook, and ServiceNow and Fortinet fell on Thursday. Oracle (NYSE: ORCL) was the only one still up for the week, because it rose 10.7% on October 28 after giving a long-term forecast; it lost 6.4% on Friday.
Friday's largest falls, at Datadog, Cloudflare, MongoDB and Snowflake, were tied by none of the coverage SaasBuzz read to news from the companies themselves.
Why the selling spread to software
The outlets covering Friday's moves pointed to the spenders. StockStory said weak results from Amazon and Intel, after Alphabet's and ServiceNow's on Thursday, "sparked widespread investor anxiety regarding aggressive artificial intelligence spending and sustained cash burn," in its report on Cloudflare, Oracle, JFrog and Okta. Amazon itself slipped only 1.4% on Friday, CNBC reported, after missing estimates while keeping its 2026 capital spending forecast of $220 billion.
24/7 Wall St. linked Datadog's fall to worries about the large cloud providers' AI spending, writing that Datadog is especially exposed "because its revenue grows as customers run more workloads in the cloud."
ServiceNow's fall was about its own outlook. Its fourth-quarter guidance fell just short of estimates, which revived fears that AI competition could pressure its business, Yahoo Finance reported. The company's third-quarter results came in above its own guidance, as our report on ServiceNow's quarter showed. Fortinet had cut its service revenue forecast.
SaasBuzz found no public statement from Datadog, Cloudflare, Okta, Snowflake, MongoDB, JFrog or Oracle about Friday's share moves by 4 p.m. ET.
What the industry is saying
SaaStr, the community for business software founders and investors, runs its own index of 25 B2B software stocks. On Thursday it posted that every one of them fell.
Post on X by @saastr
http://SaaStr.ai Index -3.7% today, 0 of 25 B2B stocks up. YTD +23.7%, ahead of the NASDAQ (+16.4%). Top gainer: none, all 25 fell. Best holding up: ServiceTitan (TTAN) -0.2% Top loser: ServiceNow (NOW) -27.0% A sector-wide selloff hit enterprise software, led by ServiceNow's plunge. https://saastr.ai/insights
Not everyone read the week as a verdict on software. Dan Ives, partner and senior managing director at Yorkville Ives, wrote on Friday morning that AI's disruption was "on full display" in tech earnings, and that his bullish view had not changed.
Post on X by @DivesTech
The disruption caused by AI is on full display during tech earnings and the uncertainty around which names and sectors will be the disruptors vs the disrupted. As we have said in this AI transformation it’s not a straight line upward, but winners remain and our bullish thesis unchanged
Others saw money moving elsewhere. "Investors are essentially reallocating some of that AI capital into sectors that are more defensive for now," Malik Ahmed Khan, a technology analyst at Morningstar, said, according to The New York Times. Joe Quinlan, head of market strategy at Merrill and Bank of America Private Bank, said that in many conversations with clients, the message was that "now it's time to think about rebalancing and putting money elsewhere."
Jason Lemkin, SaaStr's founder, gave a reason specific to software vendors on Friday: budgets are not shrinking, he wrote, but existing vendors are being cut to pay for AI agent products.
Post on X by @jasonlk
The reality is all the increase in spend and budget is going to agentic solutions It’s still muchly the same old B2B budget. In fact, B2B budgets are at a record high. But existing vendors are being rationalized, spend cut, etc. to fund agentic vendors
On ServiceNow, Oppenheimer analyst Brian Schwartz said that "ServiceNow's AI momentum counters a disruption thesis" but "doesn't establish a clear path to organic reacceleration," Yahoo Finance reported.
What it means for software builders, buyers and investors
The week split the losses in two. The three companies that gave weaker outlooks lost 24.4% to 33.9% of their value; the other seven ended the week between a 13.8% loss and a 3.6% gain, and coverage tied Friday's leg of it to other companies' spending. For investors, that is the difference between a reset in what a company is expected to earn and a change in the price the market will pay for the whole group.
The second kind reaches software through its customers. The reasons the outlets gave for Friday's drop are about how much the largest buyers of computing will keep spending, and 24/7 Wall St.'s point about Datadog applies to any vendor whose revenue rises with its customers' cloud use. If that spending slows, those vendors' revenue would feel it; nothing in Friday's coverage says it has slowed yet.
For people who buy software, a share price is not a product change. The numbers that moved the stocks this week were in the vendors' own forecasts, such as ServiceNow's guide for 18.5% growth in contracted revenue due within 12 months, and those are the numbers to read as the rest of the list reports.
