Software stocks having their best month in 25 years as AI panic flips to AI excitement — ride the wave on pullbacks
Software stocks just had their best month in over two decades. The fear that AI would kill software companies has flipped — now investors see AI as a growth driver. ServiceNow is up 40% this month, and both Snowflake and Okta just hit all-time highs after strong earnings.
Idea
For all of 2025 and early 2026, investors were terrified that AI would make traditional software companies obsolete — Wall Street called it the 'SaaSpocalypse.' That narrative just completely reversed. Software stocks are having their best month since 2001 because earnings from companies like Okta, Snowflake, and ServiceNow proved that AI actually increases demand for their products. ServiceNow alone is up 40% in a single month. When an entire sector goes from being left for dead to leading the market, institutional money managers who were underweight software are forced to buy in — and that forced buying can power the rally for weeks. Buying on short pullbacks within this uptrend lets you ride that institutional wave without chasing the absolute top.