Software stocks post best monthly gain since 2001 as AI disruption fears ease
By
Samantha Subin
Crisp on the outside, thoughtful on the inside. A keeper.
Summary
Software stocks had their best month since October 2001, with the iShares Expanded Tech-Software ETF rising 21% in May, driven by strong earnings from Snowflake and Okta. The rally signals that fears of an AI-driven "SaaSpocalypse" (the demise of software companies due to AI disruption) may be subsiding, as these companies demonstrated successful AI integration strategies that exceeded Wall Street expectations.
Key quotes
· 3 pulledThe 'SaaSpocalypse' may not be over. But for now at least, fears of software's demise have cooled.
Software stocks soared this week, driven by strong results from Snowflake and Okta, signaling that some companies are navigating their way through artificial intelligence disruption better than Wall Street expected.
The iShares Expanded Tech-Software exchange-traded fund rose 8% this week and closed May up 21%, the best monthly performance for the ETF since October 2001.
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