Snowflake’s stronger-than-expected quarterly results triggered a broad rally across the software sector, lifting shares in companies including Guidewire Software (NYSE: GWRE) and Varonis Systems (NASDAQ: VRNS).
Snowflake surged 35% in a single session, marking its best single trading day ever, after reporting a sharp jump in AI accounts on its platform from 9,100 to 13,600 in one quarter.
The company also reported product revenue growth of 34% and raised its full-year guidance by $180 million, sending a strong signal to investors across the software industry.
The results were seen as direct evidence against what markets had dubbed the “SaaSpocalypse,” a rolling selloff that had erased approximately $2 trillion from software market values since late 2025.
That selloff was driven by fears that AI would make subscription software obsolete, hollowing out established SaaS business models and eliminating demand for per-seat software licenses.
Snowflake’s numbers inverted that logic, showing that AI was driving more consumption of its platform rather than displacing it, easing fears across the broader software sector.
Snowflake CFO Brian Robins described Cortex Code as creating a “step function change” in AI revenue potential, calling it the single largest driver of the company’s full-year guidance raise.
ServiceNow gained 5%, Palantir rose nearly 6%, Oracle and Microsoft each added roughly 3%, and the iShares Expanded Tech-Software Sector ETF also moved higher in the session.
Guidewire Software jumped 6.7%, though the company’s shares remain highly volatile, having recorded 22 moves greater than 5% over the past year alone.
Guidewire is down 24% since the start of the year and, at $142.53 per share, trades 45.6% below its 52-week high of $261.88 reached in September 2025.
Varonis Systems climbed 6.2% on the day, also buoyed by the broader shift in investor sentiment around the threat AI poses to traditional software companies.
Experts noted that established software firms hold significant advantages, including enterprise relationships, proprietary data, and deep integration into customer workflows, which AI is unlikely to eliminate quickly.
The changing perspective points to a potential re-rating for the sector as investors reconsider whether these companies are positioned to leverage AI rather than be replaced by it.
