Software Stocks Have Best Month Since 2001. Talk of 'SaaSpocalypse' Subsides
Security company Okta shot up 30% Friday, reported CNBC, while data platform provider Snowflake jumped 50% this week.
They see it as part of a larger trend where software stocks "soared this week," signaling "some companies are navigating their way through AI disruption better than Wall Street expected" and that investors "may have been too quick to declare the end of software with the emergence of AI. Even as AI displaces certain tools and job functions, many software companies continue to show growth, assisted by their own AI products..."
The "SaaSpocalypse" may not be over. But for now at least, fears of software's demise have cooled... The iShares Expanded Tech-Software exchange-traded fund rose 8% this week and closed May up 21%, the best monthly performance for the ETF since October 2001. Back then it was a brief rebound during the dot-com bust, while the current rally comes as concerns about the impact of AI ripple across the sector. Software names have been hit particularly hard over the past year due to the boom in so-called vibe coding, with users able to now build apps and websites in minutes thanks to offerings from Anthropic, OpenAI and others...
Elsewhere in the software space, Atlassian climbed 26% for the week and ServiceNow surged over 20%, while Shopify, Workday and Asana each gained at least 14%.
They see it as part of a larger trend where software stocks "soared this week," signaling "some companies are navigating their way through AI disruption better than Wall Street expected" and that investors "may have been too quick to declare the end of software with the emergence of AI. Even as AI displaces certain tools and job functions, many software companies continue to show growth, assisted by their own AI products..."
The "SaaSpocalypse" may not be over. But for now at least, fears of software's demise have cooled... The iShares Expanded Tech-Software exchange-traded fund rose 8% this week and closed May up 21%, the best monthly performance for the ETF since October 2001. Back then it was a brief rebound during the dot-com bust, while the current rally comes as concerns about the impact of AI ripple across the sector. Software names have been hit particularly hard over the past year due to the boom in so-called vibe coding, with users able to now build apps and websites in minutes thanks to offerings from Anthropic, OpenAI and others...
Elsewhere in the software space, Atlassian climbed 26% for the week and ServiceNow surged over 20%, while Shopify, Workday and Asana each gained at least 14%.
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