Software Stocks Have Best Month Since 2001. Talk of 'SaaSpocalypse' Subsides

Security company Okta shot up 30% Friday, reported CNBC, while data platform provider Snowflake jumped 50% this week.

They see it as part of a larger trend where software stocks "soared this week," signaling "some companies are navigating their way through AI disruption better than Wall Street expected" and that investors "may have been too quick to declare the end of software with the emergence of AI. Even as AI displaces certain tools and job functions, many software companies continue to show growth, assisted by their own AI products..." The "SaaSpocalypse" may not be over. But for now at least, fears of software's demise have cooled... 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. Back then it was a brief rebound during the dot-com bust, while the current rally comes as concerns about the impact of AI ripple across the sector. Software names have been hit particularly hard over the past year due to the boom in so-called vibe coding, with users able to now build apps and websites in minutes thanks to offerings from Anthropic, OpenAI and others...

Elsewhere in the software space, Atlassian climbed 26% for the week and ServiceNow surged over 20%, while Shopify, Workday and Asana each gained at least 14%.

She asked for smaller.

[Ostracus]

SaaS coming out of home lab level infrastructure. Not everything has to be big.

Can't have it both ways

[JoeyRox]

AI can't make software development so much more productive that any upstart can quickly code a challenger to an entrenched offering (including customers developing their own solutions with AI), at the same time the software companies challenged by that upheaval don't see their enterprise value go down.

Re:

[sarren1901]

Maybe with regards to software, AI used by already proficient developers is a rising tide that lifts all vessels. It is reasonable to think they a startup can use AI to build something faster with the right staff and it's also reasonable those same tools can help more established companies refine their own software and add additional features to keep their product more appealing.

Both can be true at the same time.

Meanwhile, in the physical world economy

[Local ID10T]

Walmart is down about 10% after revising their expectations for the rest of the year. This is after their sales went UP 7% in the first quarter.

Walmart is anticipating a retail-pocalypse with the poorest among us no longer being able to afford to shop at Walmart. Not because people are going to a cheaper store -there isn't one, but because people will not be able to afford to shop at any store. They have committed to applying any tariff refunds to lowering shelf prices in an attempt to recruit/maintain customers. Walmart also cited rising costs due to fuel prices as a contributing factor.

All of this is from their (legally mandated to be true and accurate to the best of their knowledge) quarterly report to stockholders. You can google it for exact wording, if you care..

The stock market is not the economy. The cracks are beginning to show.

Re:

[sarren1901]

As a grocer in southern California, I can confirm that my store and others in our district are dealing with lackluster sales. There are a lot of factors to consider but the overall economy could very well be a big one.

I do know that my company has sells projections and those projections are lower then last years. Some weeks we are stilling beating those projections while other weeks it's right about where the company expected. Overall though, the company expects us to do worse this year then last year, desp

Re:

[misexistentialist]

The Walton's yachts were built with food stamp money, Walmart isn't the economy either, it's a government contractor.

BEST MONTH SINCE DOTCOM CRASH?

[fadethepolice]

Definitely a good sign.

snowflake

[robot5x]

I still don't quite understand how Snowflake is doing so well - do they really offer so much quality of life and extra functionality that you'd want to pay several thousand dollars a month for a database ?

Re: snowflake

[BranMan]

Basically it has become the business engine for their clients. All their processes run through it. To switch would be massive upheaval and expense.

Just wait...Tech stocks rise and fall in 1990's !

[bsdetector101]

For those who don't know about, tech stocks / tech mutual funds were returning 50-80% at 1 point, but then it all came crashing down. A lot of tech companies went bankrupt. Promised big profits that never happened. Sounds familiar.....