Software stocks make a comeback
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Software stocks are so back.
Why it matters: AI was going to obliterate the software sector, or so investors believed earlier this year, but it turns out that this stuff is hard to quit.
Zoom in: The State Street Software and Services ETF, which tracks about 130 software and IT stocks, rose 5.2% Thursday, hitting a new all-time high.
- The fund has heavy exposure to software-as-a-service companies, or SaaS, including ServiceNow, Workday and DocuSign.
- You may recall that those stocks fell victim to the SaaSpocalypse we wrote about earlier this year.
Where it stands: Investors really liked Salesforce's second-quarter earnings report, out after the close on Wednesday.
- The company, arguably the SaaS master, announced an expansion of a deal with Anthropic that was taken as a sign that AI would be a complement to its business — rather than its death knell.
- Evercore analysts called it a "better together" outcome.
Zoom out: Salesforce stock soared 22.6% Thursday and is now trading close to where it was before the whole SaaSpocalypse got underway.
The bottom line: To paraphrase Mark Twain, reports of the death of the software industry were perhaps a bit exaggerated.
