What happened
Shares of Atlassian (TEAM -8.43%) at Twilio (TWLO -1.90%) were both knocked on Tuesday. At 2:05 pm ET, Atlassian was down a whopping 7.9%, while Twilio was down a more modest 2.2%. At that point, the Nasdaq Composite is sporting only a 0.1% decrease.
Investors can appreciate cloud computing stocks and more Service Today (NOW -12.03%) CEO Bill McDermott for their illness on Tuesday.
E what now
In a CNBC interview Monday night, McDermott spoke about “macroeconomic crosswinds” such as the strong U.S. dollar, inflation, rising interest rates, and war in Europe. That these issues are dampening the mood among corporate decision makers is not exactly a revelation. And McDermott did say that conditions in the corporate world are not nearly as bad as Wall Street and the media portrays them.
However, investors decided to be negative and punish ServiceNow and its associated cloud-based software stocks. Some analysts think McDermott and his team may dial back their growth outlook when ServiceNow reports earnings on July 27. And if giants like ServiceNow join those like Salesforce (CRM -3.75%) and even Microsoft (MSFT -3.55%) and reduce their growth expectations, why wouldn’t smaller clothes like Atlassian and Twilio do the same?
What now
For how important it is, Atlassian guided the subscription revenue growth rate to the mid -50% range for its fiscal 2022. For Twilio, its management forecasts an annual organic growth rate of at least 30% for at least the next couple of years. The next quarterly update from those companies is expected in late July or early August.
Given how hyper-sensitive the markets are these days, expect a lot of volatility ahead for Atlassian, Twilio, and their cloud peers. But if you are a long-term buy-and-hold investor, this can be a great buying opportunity. Despite global economic concerns, providers of cloud-based communication tools like Atlassian and Twilio are doing more than well today.
Nicholas Rossolillo and his clients hold positions at Salesforce, Inc. and Twilio. Motley Fool holds positions in and recommends Atlassian, Microsoft, Salesforce, Inc., ServiceNow, Inc., and Twilio. Motley Fool has a disclosure policy.