What Happened?
Shares of banking software provider nCino (NASDAQ: NCNO) jumped 4.5% in the afternoon session after the stock was swept up in a broad market rally as Federal Reserve Chair Jerome Powell indicated that interest rate cuts could be on the horizon. Powell's comments, suggesting a potential policy shift after the central bank held rates steady throughout 2025, were a welcome development for investors. The news sparked a significant, broad-based rally, lifting stocks across the board. Technology companies, which had experienced a slump in the prior week, were among the primary beneficiaries of the renewed optimism, driving gains in stocks like nCino.
After the initial pop the shares cooled down to $28.91, up 4.1% from previous close.
Is now the time to buy nCino? Access our full analysis report here, it’s free.
What Is The Market Telling Us
nCino’s shares are not very volatile and have only had 9 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 9 days ago when the stock gained 6.2% on the news that the SaaS sector continued to rally as favorable inflation data bolstered hopes for a Federal Reserve interest rate cut. This optimism was largely driven by a benign July Consumer Price Index (CPI) report, which solidified investor expectations for a Federal Reserve interest rate cut. Following the release of the inflation data, which showed a year-over-year increase of 2.7%, the probability of a rate cut in September surged to over 96%. Lower interest rates are typically beneficial for growth-oriented technology stocks, as they can reduce borrowing costs and increase the present value of future earnings. Adding to the positive sentiment was a 90-day delay in the imposition of higher tariffs on Chinese goods, which reduced trade-related uncertainty for the technology sector.
nCino is down 13.5% since the beginning of the year, and at $28.91 per share, it is trading 32.2% below its 52-week high of $42.64 from November 2024. Investors who bought $1,000 worth of nCino’s shares 5 years ago would now be looking at an investment worth $340.92.
Today’s young investors won’t have read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next.
