Software stocks roar back from the dead — ride the AI-fueled rally on ServiceNow, Snowflake, and Palantir
Software stocks just had their best month in 25 years. Investors had been worried AI would kill software companies, but now the opposite is happening — AI spending is fueling demand for their products, and names like Snowflake, Okta, and ServiceNow are surging.
Idea
The narrative around software stocks has completely flipped. Earlier this year, Wall Street feared AI would make traditional software obsolete — the so-called 'SaaSpocalypse.' But Dell's blowout AI server numbers this week proved enterprise AI spending is very real, and software companies like ServiceNow and Snowflake are the ones selling the tools that sit on top of all that hardware. ServiceNow is already up 40% this month, and Palantir jumped another 10% after Dell's report validated their partnership. With crash hedges being unwound across Wall Street and money rotating back into growth names, this software rally looks like it has legs — especially as we head into June with more earnings and potential AI catalysts ahead.
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News sources
- Software stocks wrap up best month since 2001 as talk of 'SaaSpocalypse' subsides — CNBC
- Palantir Soars 10% as Dell Earnings Beat Validates Their AI Factory Partnership, Snowflake Lifts Software Rally — Yahoo Finance
- ServiceNow's stock soars toward historic month as AI fears fade across software — MarketWatch