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