# Software stocks have their best month in 25 years — buy the pullback in the sector leaders

_AI-generated trading idea · LONG · NOW, OKTA, SNOW_

> Canonical page: https://commonquant.ai/research/for-you/software-stocks-have-their-best-month-in-25-years-buy-the-pu--eb927a92-bb71-435f-ac15-05a8ab434df6

Software stocks just had their best month in 25 years. Earlier in 2026, investors panicked that AI would kill software companies — that fear is gone, and money is flooding back in. ServiceNow is up 40% this month alone, leading the charge.

## Idea

For months, investors dumped software stocks on fears that AI would make them obsolete. That panic created deeply depressed prices. Now the narrative has flipped — companies like Snowflake and Okta are reporting that AI is actually boosting demand, not destroying it. ServiceNow has led the recovery with a 40% monthly gain, and when a sector leader moves that hard, it typically pulls the rest of the group higher for weeks. The 'smart money' rotation into software is still early — this is month one of what could be a multi-month trend. Buying on brief dips in the leaders is the highest-conviction play right now.

## Key details

- Symbols: NOW, OKTA, SNOW
- Timeframes: daily
- Tags: \#sector\_rotation, \#software, \#AI\_recovery

## Community

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## News sources

- [Software stocks wrap up best month since 2001 as talk of 'SaaSpocalypse' subsides](https://www.cnbc.com/2026/05/29/software-stocks-wrap-best-month-since-2001-as-talk-of-saaspocalypse-.html) — CNBC
- [ServiceNow's stock soars toward historic month as AI fears fade across software](https://www.marketwatch.com/story/servicenows-stock-soars-toward-historic-month-as-ai-fears-fade-across-software-31854b69?mod=mw_rss_topstories) — MarketWatch

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