Snowflake CEO Sridhar Ramaswamy helps ring the closing bell at the New York Stock Exchange on September 30, 2025.
NYSE
The “SaaSpocalypse” may not be over. But at least for now, fears of the software’s demise have been put to rest.
Software stocks rise this week, driven by strong results snowflake And oktaSignaling that some companies are navigating their way through artificial intelligence disruption better than Wall Street expected.
iShares Expanded Tech-Software Exchange-Traded Fund It gained 8% this week and closed May with a 21% rise, the best monthly performance for the ETF since October 2001. At the time it was a brief rally during the dot-com bust, while the current rally has come as concerns about the impact of an AI wave spread across the sector.
Software names have been particularly hit over the past year by the boom in so-called vibe coding, with users now able to create apps and websites in minutes thanks to offerings from Anthropic, OpenAI and others.
Even with this month’s rally, the iShares Software ETF is down just 3.8% for the year, still badly lagging the Nasdaq, which has gained 18% in 2026.
Data platform provider Snowflake was a big driver this week, posting its best day ever on Thursday and gaining nearly 50% in four trading days after the holiday on Monday. Company announces $6 billion cloud and chip deal Amazon And as clients gravitate towards more AI tools, the guidance has been extended.
“We are also seeing customer deployments and workloads growing at a faster pace,” CEO Sridhar Ramaswamy told analysts on the company’s earnings call.
Analysts at Argus Research called Snowflake a “picks and shovels” play on generative AI and raised their price target from $250 to $300. The stock closed at $255.55 on Friday and is now up 17% for the year.
“We think Snowflake could actually be a beneficiary of GenAI growth as enterprises need to integrate and harmonize data, Snowflake’s core business, to exploit the benefits of GenAI,” the analysts wrote in a report after the earnings.
Okta was another big winner among investors, gaining a record 30% on Friday. The company reported better-than-expected results, and said the shift to agentic AI is forcing businesses to invest in identity protection tools and increase protection against a wave of bot armies.
“AI products are going to take more time, but every organization is going to be building and deploying agents,” Okta CEO Todd McKinnon told CNBC. “This is infrastructure that will be needed over the next few years.”
Elsewhere in the software sector, Atlassian climbed 26% for the week and service now Whereas, increased by more than 20% Shopify, weekday And Posture Each made a profit of at least 14%.
Among software giants that are also selling cloud infrastructure, Oracle jumped 16% and Microsoft An increase of about 8%. However, Microsoft is still down about 7% for the year, the worst performance among tech megacaps.
Watch: Market shows software companies partnering with AI giants are in favor
