Sridhar Ramaswamy, CEO of Snowflake, helps ring The Closing Bell on the New York Inventory Change on Sept. 30, 2025.
NYSE
The “SaaSpocalypse” is probably not over. However for now no less than, fears of software program’s demise have cooled.
Software program shares soared this week, pushed by robust outcomes from Snowflake and Okta, signaling that some corporations are navigating their manner by means of synthetic intelligence disruption higher than Wall Avenue anticipated.
The iShares Expanded Tech-Software program exchange-traded fund rose 8% this week and closed Could up 21%, one of the best month-to-month efficiency for the ETF since October 2001. Again then it was a quick rebound throughout the dot-com bust, whereas the present rally comes as issues in regards to the impression of AI ripple throughout the sector.
Software program names have been hit notably laborious over the previous yr as a result of increase in so-called vibe coding, with customers in a position to now construct apps and web sites in minutes due to choices from Anthropic, OpenAI and others.
With this month’s rally, the iShares software program ETF is simply down 3.8% for the yr, nonetheless badly trailing the Nasdaq, which has gained 18% in 2026.
Knowledge platform supplier Snowflake was a giant driver this week, logging its finest day ever on Thursday and gaining practically 50% within the 4 buying and selling days following the vacation on Monday. The corporate introduced a $6 billion cloud and chip cope with Amazon and raised steerage as prospects gravitate towards extra AI instruments.
“We’re additionally seeing prospects deploy and scale workloads at a quicker tempo,” CEO Sridhar Ramaswamy advised analysts on the corporate’s earnings name.
Analysts at Argus Analysis referred to as Snowflake a “picks and shovels” play on generative AI and lifted their value goal to $300 from $250. The inventory closed Friday at $255.55 and is now up 17% for the yr.
“We expect Snowflake may very well be a beneficiary of GenAI growth as enterprises more and more must unify and harmonize information, Snowflake’s core enterprise, to be able to exploit the advantages of GenAI,” the analysts wrote in a report after earnings.
Okta was one other large winner with buyers, gaining a report 30% on Friday. The corporate reported better-than-expected outcomes, and stated the shift to agentic AI is forcing companies to spend money on identification safety instruments and scale defenses towards a wave of bot armies.
“AI merchandise are going to take longer, however each group goes to construct and deploy brokers,” Okta CEO Todd McKinnon advised CNBC. “It is elementary infrastructure that is going to be required over the subsequent few years.”
Elsewhere within the software program house, Atlassian climbed 26% for the week and ServiceNow surged over 20%, whereas Shopify, Workday and Asana every gained no less than 14%.
Among the many software program giants which are additionally promoting cloud infrastructure, Oracle jumped 16% and Microsoft rose nearly 8%. Nevertheless, Microsoft continues to be down nearly 7% for the yr, the worst efficiency amongst tech’s megacaps.
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