A surge in Snowflake’s stock following strong earnings results triggered a broad rally across software names, challenging the prevailing narrative that AI would destroy the SaaS sector.
Snowflake jumped 35% in a single session, its best single-day performance ever, after reporting that AI accounts on its platform grew from 9,100 to 13,600 in one quarter.
Product revenue grew 34% and Snowflake raised its full-year guidance by $180 million, sending an immediate positive signal across the broader software sector.
The rally spread quickly, with ServiceNow gaining 5%, Palantir rising nearly 6%, and Oracle and Microsoft each adding roughly 3%, alongside a broad lift in the iShares Expanded Tech-Software Sector ETF (IGV).
Finance and accounting software company Workday (NASDAQ: WDAY) climbed 4.7% during the session, extending a recovery from a prolonged period of weakness for the stock.
Healthcare and life sciences software company Doximity (NYSE: DOCS) also gained 4.7%, benefiting from the same wave of renewed investor confidence in established software platforms.
The gains came in direct response to what markets had labeled the “SaaSpocalypse,” a rolling selloff that erased approximately $2 trillion from software market values since late 2025 on fears that AI would make subscription software obsolete.
Snowflake’s results challenged that thesis head-on, with CFO Brian Robins describing Cortex Code as creating a “step function change” in AI revenue potential and identifying it as the single largest driver of the full-year guidance raise.
Rather than AI displacing established data platforms, Snowflake’s results suggested enterprises are using AI to generate more workloads that run directly on those same platforms.
Workday’s latest move follows a difficult stretch for the stock, which dropped 3.7% just seven days prior when a selloff in Intuit (NASDAQ: INTU) reignited fears about generative AI structurally undermining legacy SaaS business models.
Intuit shares opened approximately 19% lower after investors focused on a weaker long-term outlook for TurboTax and plans to cut roughly 17% of its workforce, despite the company posting fiscal third-quarter results that topped Wall Street expectations.
The damage to Intuit was described as three-layered: TurboTax revenue guidance was cut even as the overall outlook was raised, roughly 3,000 jobs were eliminated under an “AI restructuring” banner, and KeyBanc, Stifel, and RBC Capital all reduced their price targets.
Workday remains down 36.7% since the beginning of the year, trading at $130.29 per share, which sits 48.5% below its 52-week high of $252.90 reached in June 2025.
Investors who purchased $1,000 worth of Workday shares five years ago would currently be holding a position worth only $569.67, reflecting the broader pressure on software valuations over that period.
Workday’s shares have demonstrated significant volatility over the past year, recording more than 20 moves greater than 5%, suggesting markets view the current session’s gains as meaningful but not a fundamental shift in the company’s outlook.
