Software stocks post best month since 2001 as AI disruption fears ease

Samantha Subin

1d ago· 3 min readenNews

95/100

Golden Brown

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Score95TypenewsSentimentpositive

Summary

Software stocks had their best month since October 2001, with the iShares Expanded Tech-Software ETF rising 21% in May. The rally was driven by strong earnings from Snowflake and Okta, which saw record stock pops as investors responded positively to their AI software strategies. This comes amid cooling fears of a "SaaSpocalypse" — the anticipated disruption of software companies by artificial intelligence. While concerns about AI's impact on the software industry aren't gone entirely, the market sentiment has shifted positively as some companies demonstrate they can navigate AI disruption effectively.

Key quotes

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The "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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Snowflake and Okta both saw record stock pops this week as investors found favor in their AI software strategies.