Trading “good news is bad news” has limits if your attention span is longer than a day

Atlassian shares skyrocketed 23% in premarket trading on Friday after the embattled workflow software firm hiked its FY2026 guidance and reported better-than-expected revenue and profit results for its fiscal third quarter.

For the quarter ended March 31, 2026, the company reported:

• Revenue of $1.79 billion, up 32% year-over-year and topping Wall Street expectations of $1.695 billion (compiled by Bloomberg).

• Adjusted EPS of $1.75 per share, more than 30% ahead of analyst estimates for $1.34 of adjusted earnings.

CEO Mike Cannon-Brookes noted that “Our strong Q3 results show the power of our strategy in action, with total revenue growing 32% year-over-year to $1.8 billion, as customers sign bigger, longer-term commitments, and connect their teams and workflows on our AI-powered platform,” the company also hiked its fiscal year 2026 outlook, ending June 30. Atlassian now expects:

• Total revenue year-over-year growth to be approximately 24%, up from 22% expected in the previous quarter.

• Higher revenue growth for its key businesses, with Cloud now expected to grow 26.5%, Data Center 21.5%, and Marketplace and other 6.5%, compared to the year before.

The latest jump is a sigh of relief not only for Atlassian — which has seen its shares fall more than 50% in 2026 — but also the wider software complex at large, which has been under relentless pressure from an AI-spooked selloff in recent months. While this certainly won't kill the "SAASpocalypse" thesis altogether — the idea that the moat of software businesses will disappear in an age of vibe-coding — it may blunt some of the concerns, or at the very least push the timeline of any anticipated disruption back a few quarters.

Strong earnings from Five9, and even Reddit, are also helping the software landscape this morning, with a number of high profile SAAS stocks in the green, includingHubspot, GitLab, Workday, ServiceNow, Salesforce, and Figma.

Earlier in March, Atlassian announced it was laying off about one-tenth of its staff “to self-fund further investment in AI and enterprise sales, while strengthening our financial profile.”

Social media platform Reddit climbed late Thursday after guiding for stronger sales in the current quarter and posting Q1 numbers that were better than analysts had expected. Reddit reported:

• Q1 earnings per share of $1.01 vs. analysts’ expectations of $0.57.

• Revenue of $663.4 million vs. expectations for $607.7 million.

• 126.8 million “daily active uniques” vs. the 125.9 million expected.

• Sales guidance for Q2 2026 of between $715 million and $725 million (midpoint $720 million) vs. analysts’ estimates of $710.9 million.

After surging 40% last year, Reddit has struggled since last September, when it hit a record closing high of $270.71. The stock closed Thursday roughly 45% below that level.

The drop is not so much because the outlook for sales and earnings at the company have weakened dramatically. (In fact, Wall Street analysts have lifted their sales estimates for the next 12 months by about 30% since then, and raised earnings estimates by about 70%.)

It’s that the price-to-earnings multiple on the stock has plunged from over 90x expected earnings over the next 12 months to about 32x, suggesting that sentiment around the stock — which had been something of a favorite for retail traders last year — has ebbed significantly.

The bottom is falling out of Roblox in postmarket trading after the video game company’s Q1 daily active users fell short of estimates and management cut full-year guidance.

For the period ended March 31, the company reported: 

• Net revenue of $1.44 billion (compared to analyst estimates for $1.42 billion).

• Daily active users of 132 million (estimate: 143.8 million).

The real pain, though, comes from the reduced full-year outlook, with management lowering their view for sales to between $5.87 billion and $6.14 billion, down from a range of $6.02 billion to $6.29 billion. In other words, the old base case for sales is now their best-case scenario.

The firm also cut its outlook for 2026 bookings (money spent on in-game currency known as Robux) to a range of $7.33 billion to $7.6 billion (previously $8.28 billion to $8.55 billion).

Analysts were way off-side, having expected full-year revenue of $6.6 billion and bookings of $8.4 billion.

The stock hit its lowest level since October 2024 in the after-hours session. It’s been languishing near its 52-week low after halving over the past six months, with analysts wondering whether the kid-focused company has a plan to stay out of legal trouble, monetize, and “age up” in the years ahead. 

Roughly one-third of the video game company’s users are under 13. This month, Roblox announced expanded controls for parents and the rollout of Roblox Kids (for ages 5 to 8) and Roblox Select (for ages 9 to 15) this June. These launches are one part of its multitiered safety plan, which includes third-party biometric scans — something kids have been expertly outsmarting. 

Roblox’s decision to cut its guidance for 2026 was “largely safely-related,” Roblox’s C-suite said on Thursday’s earnings call. As Roblox started age-gating, CFO Naveen Chopra explained, many users lost access to intercommunications on the platform — resulting in a lack of engagement and daily active users, as well as negative App Store reviews (which management also blamed on running annoying ads).

David Baszucki, Roblox CEO:

“We have seen a reduction in App Store rating, and we believe this may be contributing to a reduction in organic sign ups that typically flow from app stores.”

Naveen Chopra, Roblox CFO:

“We do know that the fact that we had more sign up headwinds over the last few months is going to put pressure on bookings over the remainder of the year.”

Over the past month, the company has also importantly settled with several states over lawsuits that allege the company failed to implement proper security to protect children from adults on the site, which showed up in the company’s quarterly bill.

The platform paid out $1.5 billion to creators in 2025, and the company overall remains in the red.

AI memory play Western Digital posted stronger-than-expected quarterly earnings and sales figures.

Shares of the company, which have run up 131% so far this year, were down 3.6% as the beats weren’t able to satiate investors, a similar situation that played out with its peer Sandisk, which also reported earnings on Thursday afternoon.

Here’s how the results looked:

• Fiscal Q3 revenue of $3.34 billion vs. the $3.25 billion consensus analyst expectation, per FactSet.

• Adjusted earnings per share of $2.72 vs. the $2.39 analysts had predicted.

• Fiscal Q4 guidance for adjusted EPS of $3.10 to $3.40 ($3.25 midpoint) vs. analyst estimates of $2.75.

• Sales guidance for Q4, which ends in June, of $3.55 billion to $3.75 billion ($3.65 billion midpoint) vs. estimates of $3.46 billion.

A maker of hard disk drives that are suddenly in high demand due to the AI data center build-out, Western Digital — along with Seagate Technology Holdings, Sandisk, and Micron — is a cornerstone of the AI memory trade, which has delivered massive gains over the last year. Western Digital alone is up more than 1,000% over the last 12 months and is one of the top-performing names in the S&P 500 in 2026.

Data storage company Sandisk dropped late Thursday despite reporting much better-than-expected quarterly numbers. The massive beneficiary of the data center boom — the stock topped the S&P 500 last year and is leading it again in 2026 with an astounding year-to-date gain of about 360% — reported:

• Non-GAAP diluted earnings per share of $23.41 vs. the $14.62 forecast from Wall Street analysts polled by FactSet.

• Revenue of $5.95 billion vs. a $4.72 billion consensus forecast from FactSet.

• Non-GAAP EPS guidance for the current quarter, which ends in June, of $30 to $33 vs. Wall Street’s $23.38 expectation.

• Current-quarter revenue guidance of $7.75 billion to $8.25 billion ($8 billion midpoint) vs. the $6.62 billion analyst forecast.

Shares fell 6% after-hours.

Sandisk was spun off from Western Digital in February 2025, and since then, its AI-driven stock price run-up has been nothing short of spectacular. The stock has risen more than 3,300% over the last 12 months, creating more than $150 billion in market value. When it emerged as a stand-alone company, it was valued at about $5 billion.

Can such a run-up continue? The law of large numbers would suggest not.

Sandisk executives have been adamant that demand for products — to store the massive amounts of data required for and produced by AI — shows no sign of slowing. But the sell-off after the numbers suggests investors who have ridden the shares up are nervous.