The number of survivors of the "SaaS apocalypse" is astonishing! Seven months after the impact of AI, a large number of software companies are making a strong comeback.

In February of this year, a panic dubbed the "SaaS doomsday" swept through software stocks, wiping out hundreds of billions of dollars in market value under the threat of AI replacement. Seven months later, the number of survivors of this "doomsday" is remarkable—the stock prices of many SaaS companies have not only recovered their losses but have also reached multi-year highs.

The key catalyst driving this sentiment reversal was the strong quarterly results reported by Marc Benioff's Salesforce. The stock surged 23% last Thursday, its biggest single-day gain in six years, and has rebounded 46% since its February lows. In an interview with CNBC, Benioff stated bluntly, "The so-called 'SaaS doomsday' narrative is complete nonsense."

On that day, software leader Okta surged 29% in a single day (its year-to-date gain reached 86%), CrowdStrike rose 20.5%, and Atlassian's stock price also climbed to its highest level since July 2025.

From a broader perspective , the State Street SaaS ETF has rebounded 45% from its February 23 low, reaching a record high, and is up 9% year-to-date . Jefferies analyst Brent Thill wrote in a research report: "We are witnessing a 'software geek revenge,' and this momentum is expected to continue; the threat of AI replacement is severely overestimated."

The starting point of the panic: Four paragraphs that sparked the "doomsday" scenario.

The trigger for this storm was Anthropic, a leading AI company, announcing a new feature for its chatbot's Cowork function, which could "accelerate contract review, confidentiality agreement classification, and compliance workflows within enterprise legal teams." Just four descriptive paragraphs were enough to cause a collective plunge in SaaS stocks.

Subsequently, panic continued to spread in late February and extended into March and April. The core logic of the market was that AI would enable companies to build their own proprietary tools on demand, thereby replacing the specialized functions of existing SaaS software, and the business models of traditional software companies would suffer a fundamental blow.

However, at that time, some heavyweights in the industry had already questioned this response.

Nvidia CEO Jensen Huang called the market reaction "the most illogical thing in the world." Some analysts also pointed out that, just like during the dot-com bubble, there will inevitably be winners and losers in the AI wave, and it is neither fair nor accurate to categorize all SaaS companies as losers.

A professional moat determines life or death.

Seven months later, the market differentiation has become clear. Companies that can solve highly complex professional problems and possess core assets that are difficult for AI to easily replicate are the main players in this rebound.

Salesforce's rebound is a prime example. At the beginning of the year, the market generally had doubts about its AI agent deployment capabilities, but the latest financial report completely reversed that perception—its Agentforce annual recurring revenue reached $1.5 billion, a year-on-year increase of 240%.

Benioff emphasized that cutting-edge big data models "rely on" customer relationship management data, rather than replace it, and the recent integration agreement between Salesforce and Anthropic is strong evidence of this logic.

Okta, an identity verification service provider, has also benefited from this logic, with its stock price surging nearly 140% since its February low. Against the backdrop of large-scale deployment of AI agents, the value of the professional capability to verify the true identity of "users" is becoming increasingly apparent.

Okta's latest financial report shows that new product bookings accounted for 30% of total bookings, up from 5% in the previous quarter. Bloomberg Intelligence analyst Mandeep Singh pointed out that this indicates that enterprises are "increasingly prioritizing identity security as an early priority in agent deployment expansion."

The cost of a low moat

Not all companies have had their "moment of revenge." While some SaaS companies have rebounded from their year-to-date lows, their overall performance remains weak, reflecting continued market concerns about their business models.

Workflow management software Monday.com is still down 35% year-to-date, with its products considered easily replaceable by lightweight productivity tools built by enterprises using AI. Tax software giant Intuit has seen an even steeper decline of 48% this year.

Warning signs have also emerged in the private market.

Database company Airtable was acquired by Bending Spoons SpA for $2.25 billion, bringing the company's valuation to $11.7 billion in 2021. The market interprets this deal as yet another example of a SaaS startup being acquired at residual value.

Analysts point out that Airtable's approximately 20% annual revenue growth has failed to dispel concerns that its core product—essentially an enhanced spreadsheet—is too simple and easily replicated by AI programming tools.

An era of differentiation: Not all SaaS should be treated equally.

KeyBanc analyst Jackson Ader offered a succinct explanation for this rebound: "We've all gradually realized that this industry will be more resilient than expected... We're not going to disappear. That's why Salesforce's decent, but not spectacular, earnings report triggered such a huge market reaction."

It's worth noting that Salesforce's financial data itself wasn't particularly impressive—revenue growth for the quarter ending in July was 11%, a slowdown of 2 percentage points from the previous quarter; excluding the consolidation contribution from the acquisition of Informatica in November last year, the organic growth rate was only 6.4%. However, the company 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 forward-looking signal far exceeded the impact of the data itself.

After this unnecessary upheaval, a new consensus is emerging in the market: in the AI era, the fate of SaaS companies depends on the difficulty of the problems they solve and whether their core assets are difficult for cutting-edge AI labs to replicate at a reasonable cost. Those "survivors" who pass this test are regaining market favor—although the ultimate winner remains to be seen.

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