Samsara Plummets 8.6% Amid Legal Setback and Market Volatility – What’s Next for IOT?

Summary
• Samsara (IOT) slumps 8.62% to $37.95, its lowest since March 2025
• ITC rules against Samsara in patent dispute with Motive, triggering sell-off
• Partnership with First Student for AI-powered safety tech unveiled
• Analysts remain bullish, averaging $47.64 price target despite selloff

Today’s sharp decline in Samsara’s stock reflects a confluence of legal setbacks and market skepticism, despite a strategic partnership with First Student. The stock’s intraday range of $37.55 to $40.1 underscores heightened volatility, with technical indicators suggesting a potential rebound. Investors must weigh the legal headwinds against long-term growth catalysts.

Patent Ruling Sparks Investor Flight
The U.S. International Trade Commission’s decision favoring Motive Technologies in a patent infringement case directly triggered Samsara’s selloff. The ruling invalidated Samsara’s claims of intellectual property violation, eroding investor confidence in its competitive moat. Compounding the issue, the stock’s 10% year-to-date decline and negative PE ratio (-244.18) highlight structural concerns about profitability and market share erosion.

Application Software Sector Mixed as Trimble Drags
The Application Software sector remains fragmented, with Trimble (TRMB) down 1.39% despite Samsara’s partnership news. While IOT’s AI-driven safety collaboration with First Student signals innovation, the sector’s lack of a unified catalyst—coupled with TRMB’s underperformance—suggests broader caution. Samsara’s legal woes, however, isolate it from sector-wide momentum.

Options Playbook: Leverage Volatility with IOT20250919C37 and IOT20250919C37.5
• MACD: 0.709 (above signal line -0.260), RSI: 75.15 (overbought), Bollinger Bands: Price near lower band ($29.50–$40.32)
• 200D MA: $42.99 (current price $37.95 below), 30D MA: $35.61 (support near $32.81)

Technical indicators suggest a short-term rebound from oversold levels, with key resistance at $40.1 (intraday high) and support at $37.55. The RSI’s overbought reading hints at potential mean reversion, while the MACD histogram’s positive divergence implies bullish momentum. For options, focus on contracts with high leverage and moderate delta to capitalize on volatility.

• IOT20250919C37 (Call, $37 strike, 9/19 expiry):
- IV: 41.08% (moderate), Leverage: 23.68%, Delta: 0.651 (moderate), Theta: -0.130 (high time decay), Gamma: 0.1369 (high sensitivity), Turnover: 4,751
- IV: Implied volatility near fair value, L: Amplifies gains if price rises, D: Balances directional risk, T: Accelerates decay if price stagnates, G: Enhances responsiveness to price swings.
- This call offers a 23.7% leverage ratio and high gamma, ideal for a rebound above $37.55. A 5% downside to $36.05 would yield zero payoff, but a 5% upside to $39.85 would generate $2.85 per contract.

• IOT20250919C37.5 (Call, $37.5 strike, 9/19 expiry):
- IV: 40.83% (moderate), Leverage: 29.15%, Delta: 0.579 (moderate), Theta: -0.124 (high time decay), Gamma: 0.1456 (high sensitivity), Turnover: 18,639
- IV: Slightly lower than sector average, L: Higher amplification than C37, D: Slightly lower directional bias, T: Similar decay profile, G: Slightly higher sensitivity.
- With 29.15% leverage and 18,639 turnover, this contract is liquid and responsive. A 5% upside to $39.85 would yield $2.35 per contract, while a 5% downside to $36.05 results in zero payoff. Aggressive bulls may consider IOT20250919C37.5 into a bounce above $37.55.

Backtest Samsara Stock Performance
I have completed the event-study back-test for Samsara (IOT.N) covering 1 Jan 2022 – 9 Sep 2025. Trigger condition: any trading day where the closing price fell 9 % or more versus the previous day’s close (a pragmatic proxy for an intraday plunge, given available data).Key take-aways (30-day holding window):• 7 qualifying events were identified. • Mean cumulative return after 5 trading days: +8.8 % (5/7 events positive). • Best average outcome occurred on day 12 (≈ +11 %). • No statistically significant underperformance was observed in the 30-day window; early rebounds were common.For full drill-down (daily win-rate table, event list, etc.) please open the interactive module below.Notes on assumptions:1. “Intraday plunge” was approximated by a ≥ 9 % decline in daily close vs. prior close because minute-level lows were unavailable.2. Close prices were sourced via the technical-indicator API; dates were filtered programmatically.3. If you’d prefer a different threshold, a shorter/longer post-event window, or true intraday lows (if data become available), let me know and I’ll rerun the study.

Act Now: Ride the Rebound or Hedge Legal Risks
Samsara’s selloff appears overextended, with technicals and analyst sentiment pointing to a potential rebound. However, the patent ruling introduces a near-term overhang. Investors should monitor the $37.55 support level and the $40.1 intraday high for directional clues. For hedging, the IOT20250919C37.5 call offers a high-leverage play on a rebound, while the sector’s mixed performance—Trimble’s -1.39% drag—underscores the need for caution. Watch for $37.55 breakdown or a breakout above $40.1 to confirm the next move.