Stocks got whipsawed on Wednesday as initial excitement at the idea that the Federal Reserve might slow the pace of interest rate hikes gave way to the dawning realization that the central bank will remain utterly committed to fighting inflation, seemingly at all costs. After poking into positive territory briefly in the afternoon, the Dow Jones Industrial Average (^DJI -0.11%), S&P 500 (^GSPC 0.02%), and Nasdaq Composite (^IXIC 0.10%) all suffered sizable losses by the close.


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Data source: Yahoo! Finance.

Given the volatility, it was surprising to see a couple of stocks manage to produce huge gains of 40% or more. Perhaps more surprising was the fact that both of them came from the hard-hit technology sector. Below, you'll learn more about why Benefitfocus (BNFT) and Bandwidth (BAND 1.65%) were such big winners on a tough day for the stock market overall.

Benefitfocus gets an offer it can't refuse

Shares of Benefitfocus managed to post huge gains on Wednesday, finishing the day higher by 48%. The cloud-based benefits-administration software specialist got an acquisition bid, with the buyer taking advantage of the long-term decline in the stock's value to pick up what it sees as a relative bargain.

Voya Financial (VOYA 0.96%) and Benefitfocus reached an agreement  under which Voya will acquire all of Benefitfocus's outstanding shares. The all-cash transaction values the company at $570 million, with shareholders to receive $10.50 per share for their holdings.

The deal has advantages for both companies. Voya has worked to center its strategic vision on the workplace. Capturing new opportunities to offer cutting-edge technology to help employers manage their employee benefits more effectively is an obvious way to bulk up its broader business. For Benefitfocus, meanwhile, Voya's extensive customer base, financial and technological resources, and more extensive network of operational support should serve to accelerate growth and adoption of its software.

The news is bittersweet for Benefitfocus shareholders, as the stock had traded above the $10.50 per-share buyout price as recently as April. This isn't the first acquisition of a high-growth cloud company  at rock-bottom prices, and it highlights one risk that long-term investors face when a company chooses not to stay independent long enough to recover from tough conditions.

Bandwidth climbs into the cloud

Shares of Bandwidth, meanwhile, rose 42%. The cloud-based enterprise communications company reported third-quarter results that showed continued growth and good prospects ahead.

Bandwidth's Q3 numbers were better than expected even if the growth rates they implied weren't all that appealing on their face. Revenue climbed 13% to $148 million, and adjusted earnings of $0.27 per share were up 8% year over year and came in better than expected. Indeed, investors believed that Bandwidth would barely stay profitable even on an adjusted basis for the quarter, so the bottom-line growth came as a positive surprise.

Bandwidth's business metrics saw some pressure, but it didn't stop the company from boosting its guidance for the year. Dollar-based net retention rate fell from 125% in the year-ago period to 109% in the most recent quarter, and active customer counts were up by just 5% over the past 12 months. Yet the company now expects full-year sales of $562 million to $564 million, with adjusted earnings of $0.35 to $0.37 per share to finish 2022.

Even after the move higher, though, Bandwidth shares have lost well over 75% of their value since this time last year. It could take a lot more good news for shareholders to regain all their confidence.