Salesforce surges 23%, triggering a SaaS rebound as Wall Street re-bets on traditional software.
SaaS stocks rebounded across the board, with Salesforce surging 23% in a single day, reigniting Wall Street's enthusiasm for software stocks.
Software stocks rebounded sharply on Thursday after Salesforce released better-than-expected quarterly results, with a clear reversal in sentiment in the SaaS sector, which had been suppressed by the threat of AI replacement.
Salesforce shares surged 23% in a single day, narrowing its year-to-date decline to about 4%. Prior to this, the stock had fallen as much as 43% from its closing price at the end of 2025.
(Salesforce shares surged, narrowing year-to-date decline to approximately 4%)
Software stocks that had been hit hard, such as ServiceNow, Figma, and Asana, also rebounded. The cybersecurity sector also strengthened, with CrowdStrike rising 20.5% and Okta surging 29%, both companies releasing their earnings reports on the same day.
(Software sector surged on Thursday)
KeyBanc analyst Jackson Ader stated:
We are all gradually realizing that this industry will be more resilient than expected... We will not disappear... That's why Salesforce's decent but not outstanding performance report has triggered such a huge market reaction.
The performance wasn't outstanding, but the market chose to look forward.
Salesforce's financial data is not particularly outstanding.
According to Wall Street Insights , the company's revenue growth rate was 11% in the quarter ending in July, a slowdown of 2 percentage points compared to the first quarter; if the consolidation contribution from the acquisition of Informatica in November last year is excluded, the organic growth rate is only 6.4%.
However, Salesforce projected a slight acceleration in organic growth in the second half of the year and accordingly raised its full-year revenue guidance. The market's reaction to this signal was far stronger than the data itself suggested.
Analysts believe this is precisely the logic behind the current rebound: investors previously overreacted by heavily selling off related stocks due to concerns that AI would disrupt traditional software models. Software companies are still experiencing growth, and even though the growth rate has slowed, the industry has not collapsed as pessimistic predictions suggested.
A wave of technology mergers and acquisitions continues to emerge.
The market attention drawn by Salesforce's earnings report is not the only focus in the technology industry recently.
According to The Information, Nvidia has agreed to acquire open-source AI platform Hugging Face for $12.9 billion, the latest case in a wave of mergers and acquisitions in the tech industry over the past 18 months.
This wave of mergers and acquisitions also includes Stripe's reported $7 billion acquisition of OpenRouter, SpaceX's acquisition of Cursor, Salesforce's acquisition of Informatica, and Google's acquisition of Wiz.
The regulatory environment is now vastly different. Tech companies are clearly aware that the current window of opportunity for lenient antitrust measures is limited, with an estimated two years remaining, which has significantly accelerated the current pace of mergers and acquisitions.
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