The software bear market has taken down stocks both big and small.
The iShares Expanded Tech-Software ETF, which tracks top software stocks like Microsoft, Salesforce, and ServiceNow, is down 27% on fears of AI disruption, but some stocks have fallen even further.
Amplitude (AMPL 1.96%), a small-cap software-as-a-service (SaaS) stock focused on digital product analytics, is down 41% this year, even as the company just delivered one of its fastest quarters of revenue growth in recent years, and launched its Agentic AI Analytics platform after testing it for several months.
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Momentum is building
In the fourth quarter, revenue growth clocked in at 17% to $91.4 million, which topped estimates at $90.4 million, and adjusted earnings per share improved from $0.02 to $0.04, below the consensus at $0.05.
The company also reported record free cash flow of $23.5 million for the year and $11.2 million in the fourth quarter.
In an interview with the Motley Fool, CFO Andrew Casey explained the company overhauled its pricing and packaging strategy when he joined Amplitude, simplifying pricing, extending contract lengths, and offering discounts for higher amounts of consumption.
Because it's signing customers to longer contracts, it's also seeing remaining performance obligations grow rapidly, which was up 35% to $417.7 million, showing that customers are gaining more confidence in the product.
Amplitude typically gives conservative guidance, and for the first quarter, it called for revenue of $91.7 million-$93.7 million, or 16% growth, and it sees revenue of $390 million-$398 million for the full year, or 15%.
The company is also targeting an adjusted earnings per share of $0.08-$0.13 for 2026, compared to $0.06 in 2025. Casey explained that his goal is to grow expenses slightly slower than revenue to drive margin expansion over time.
Amplitude's AI push
Over the last few years, Amplitude has been focused on building out a complete digital analytics platform to eliminate the need for competing point solutions and provide everything its customers need for product analytics.
It's done that by making acquisitions and adding new products, and last week, the company took what might have been its biggest step yet, launching its Agentic AI Analytics platform globally, which will take advantage of what the company says is the world's largest database of user behavior.
The AI analytics platform takes advantage of coding assistants from the likes of Anthropic and OpenAI to offer products like Global Agent, which can give instant answers to complex questions in plain language, helping customers easily get insights into their data. The global agent can build dashboards, investigate root causes, and explain what's happening across funnels, experiments, segments, and customer journeys.
According to Casey, customer feedback for AI analytics has been positive, and agentic queries are rapidly taking off. In October 2025, there were almost no agentic queries, and today, they make up 25% of the total, showing the concept is taking off.
NASDAQ: AMPL
Key Data Points
Is Amplitude a buy?
After the software sell-off this year, Amplitude has lost 41% year-to-date, though the business is executing and growth is solid.
To take advantage of the discount in the stock price, the company announced a $100 million share buyback authorization, equal to 11% of shares outstanding. Additionally, Amplitude has $192 million in cash and marketable securities, making the stock look even cheaper.
The business appears to be where management wants it to be right now, and the new agentic AI analytics platform is promising. Still, there's a lot of uncertainty in the software sector right now, and it's unclear if investor sentiment is going to change anytime soon, as investors seem to want proof that the stocks can be resilient to AI disruption.
For now, opening a small position in Amplitude looks like a smart move. The stock is likely to remain volatile, but it's chasing a large opportunity, and the new AI analytics platform has plenty of disruptive potential itself.
