Dj Dir Campbell Sells 253 Of Dynatrace Inc >Dt

The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how software development stocks fared in Q3, starting with PagerDuty .

As legendary VC investor Marc Andreessen says, "Software is eating the world", and it touches virtually every industry. That drives increasing demand for tools helping software developers do their jobs, whether it be monitoring critical cloud infrastructure, integrating audio and video functionality, or ensuring smooth content streaming.

The 11 software development stocks we track reported a very strong Q3. As a group, revenues beat analysts’ consensus estimates by 2.7% while next quarter’s revenue guidance was in line.

In light of this news, share prices of the companies have held steady as they are up 1.3% on average since the latest earnings results.

PagerDuty

Born from the frustration of developers being woken up by unprioritized alerts, PagerDuty is a digital operations management platform that helps organizations detect and respond to IT incidents, outages, and other critical issues in real-time.

PagerDuty reported revenues of $124.5 million, up 4.7% year on year. This print was in line with analysts’ expectations, but overall, it was a slower quarter for the company with full-year revenue guidance missing analysts’ expectations significantly and revenue guidance for next quarter missing analysts’ expectations significantly.

PagerDuty achieved the highest full-year guidance raise but had the weakest performance against analyst estimates of the whole group. The company added 76 customers to reach a total of 15,398. Still, the market seems discontent with the results. The stock is down 36.4% since reporting and currently trades at $12.12.

Read our full report on PagerDuty here, it’s free for active Edge members.

Best Q3: JFrog

Named after the amphibian that continuously evolves from egg to tadpole to adult, JFrog provides a platform that helps organizations securely create, store, manage, and distribute software packages across any system.

JFrog reported revenues of $136.9 million, up 25.5% year on year, outperforming analysts’ expectations by 6.6%. The business had an exceptional quarter with an impressive beat of analysts’ billings estimates and EPS guidance for next quarter exceeding analysts’ expectations.

JFrog scored the biggest analyst estimates beat among its peers. The company added 45 enterprise customers paying more than $100,000 annually to reach a total of 1,121. The market seems happy with the results as the stock is up 36.4% since reporting. It currently trades at $64.47.

Is now the time to buy JFrog? Access our full analysis of the earnings results here, it’s free for active Edge members.

Weakest Q3: F5

Originally named after the F5 tornado, the most powerful on the meteorological scale, F5 provides security and delivery solutions that protect applications across cloud, data center, and edge environments for large organizations.

F5 reported revenues of $810.1 million, up 8.5% year on year, exceeding analysts’ expectations by 2%. Still, it was a slower quarter as it posted full-year EPS guidance missing analysts’ expectations significantly and revenue guidance for next quarter missing analysts’ expectations significantly.

As expected, the stock is down 15.6% since the results and currently trades at $245.19.

Read our full analysis of F5’s results here.

Dynatrace

With its platform processing over 30 trillion pieces of IT performance data daily, Dynatrace provides an AI-powered platform that helps organizations monitor, secure, and optimize their applications and IT infrastructure across cloud environments.

Dynatrace reported revenues of $493.8 million, up 18.1% year on year. This number topped analysts’ expectations by 1.3%. Taking a step back, it was a satisfactory quarter as it also produced an impressive beat of analysts’ EBITDA estimates but a significant miss of analysts’ billings estimates.

The stock is down 9.8% since reporting and currently trades at $44.78.

Read our full, actionable report on Dynatrace here, it’s free for active Edge members.

Fastly

Taking its name from the core advantage it delivers to customers, Fastly operates an edge cloud platform that processes, secures, and delivers web content as close to end users as possible, enabling faster digital experiences.

Fastly reported revenues of $158.2 million, up 15.3% year on year. This print beat analysts’ expectations by 4.7%. Overall, it was an exceptional quarter as it also logged EPS guidance for next quarter exceeding analysts’ expectations and an impressive beat of analysts’ EBITDA estimates.

Fastly had the weakest full-year guidance update among its peers. The stock is up 28.2% since reporting and currently trades at $10.35.

Read our full, actionable report on Fastly here, it’s free for active Edge members.

What Happened?

A number of stocks fell in the afternoon session after markets faded the Nvidia rally in the morning session, as investors remained uncertain about future rate cuts. 

While the trading day began with significant enthusiasm, pushing the Dow Jones Industrial Average up more than 700 points and the Nasdaq Composite up 2.6%, momentum quickly evaporated as the session wore on. The primary catalyst for this sharp reversal was a stronger-than-expected jobs report, which reduced the implied odds of a December interest rate cut to less than 40%.This macroeconomic anxiety overshadowed stellar corporate performance. Nvidia initially surged 5% on blockbuster earnings and CEO Jensen Huang's bullish outlook on "off the charts" demand for Blackwell chips. However, the stock eventually turned negative, acting as a heavy weight that dragged the broader indices into the red. The sell-off partly reflects a deepening caution regarding high-flying tech valuations in a "higher-for-longer" rate environment. 

Consequently, investors appeared to rotate capital away from volatile growth sectors and toward defensive staples, evidenced by Walmart's 6% gain following its own earnings beat. Ultimately, the market could not sustain the morning's euphoria, as traders prioritized rate realities over AI potential.

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:

• Cloud Monitoring company Dynatrace fell 3.3%. Is now the time to buy Dynatrace? Access our full analysis report here, it’s free for active Edge members.
• Advertising Software company The Trade Desk fell 3.3%. Is now the time to buy The Trade Desk? Access our full analysis report here, it’s free for active Edge members.
• Data Infrastructure company Confluent fell 3.5%. Is now the time to buy Confluent? Access our full analysis report here, it’s free for active Edge members.

Zooming In On Confluent (CFLT)

Confluent’s shares are very volatile and have had 24 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 7 days ago when the stock dropped 3.7% on the news that investors showed signs of fatigue with the AI-led rally, rotating out of high-valuation growth names. 

After a fantastic run, many of the high-flying AI and technology stocks saw investors take profits: selling shares to lock in their gains.This is often called a "market rotation." Money is moving out of the red-hot tech sector (which some worry has become too expensive) and into other parts of the market that investors may currently deem more stable or reasonably-priced.There's a secondary reason for the cautious mood: The long government shutdown came to an end. Though it's typically interpreted as good news, it also means a flood of delayed economic reports will be released. For weeks, investors were "flying blind" without key updates on the economy's health, like inflation data and the jobs report. In typical "sell the news" fashion, investors may also be taking profits and selling in anticipation that the new data would potentially give the Federal Reserve reasons to slow or even pause future rate cuts.

Confluent is down 22.6% since the beginning of the year, and at $21.87 per share, it is trading 41.9% below its 52-week high of $37.65 from February 2025. Investors who bought $1,000 worth of Confluent’s shares at the IPO in June 2021 would now be looking at an investment worth $485.67.