The stock market fared well in November, and the S&P 500 (SNPINDEX: ^GSPC) index rose by 8.9% in 30 days. However, Confluent (CFLT 1.71%) missed the memo. Shares of the data-streaming technology expert fell 26.6% in November 2023, according to data from S&P Global Market Intelligence. The big drop sprung from Confluent's third-quarter earnings report at the very start of the month, or rather, from management's market forecast in that report.

Why did Confluent miss the November rally?

There was nothing wrong with the data mover's earnings report. The average analyst expected break-even earnings on sales near $195 million. The actual results exceeded these targets, as the bottom line swung from a net loss of $0.13 per share to positive earnings of $0.02 per share. Revenues rose 32% year over year, landing at $200 million.

That was not the problem here. Instead, many Confluent investors headed for the exits after the earnings call, where management issued revenue guidance below the Street projections at the time.

Fourth-quarter sales were aimed at roughly $205 million, merely 22% above the same period in 2022. The consensus view among analysts at the time was approximately $213 million. The core issue lies with two of Confluent's largest customers, one of whom is moving operations from cloud servers to in-house data centers, and the other is being acquired. In both cases, these critical Confluent customers will use less of the company's data-streaming services going forward.

Confluent's stock price closed a jaw-dropping 42% lower the next day. Analysts were quick to issue bullish reports, calling the stock a buy at these bargain-basement prices, even though many also lowered their target prices for the stock. Despite this rush of analyst support, the damage was done, and Confluent still experienced a substantial price drop in November as a whole.

Where will Confluent stock go from here?

So Confluent is losing some low-hanging fruit in the form of existing mega-customers, but the company is still growing at a breakneck pace and exploring a massive untapped market. Data streams managed by Confluent's Kafka software play essential roles in high-growth market segments, such as the Internet of Things, Web3, and real-time data analytics, and management sees a global market worth $60 billion of annual revenues. The company has captured roughly 1% of that opportunity so far. Even a modest long-term market share of 10% to 20% would represent a spectacular boost to Confluent's business.

Confluent's revenues are lumpy due to the company's small size, so the status of one or two important contracts can unleash exaggerated market reactions from time to time. But the fundamental story is still the same: Confluent's innovative data delivery solutions are in high demand, and the business opportunity should only grow as the aforementioned technology trends play out.

Long story short, I see this price drop as a wide-open buying window for Confluent stock.