AI Fails to Disrupt Software as Salesforce Leads Charge Higher

The investment thesis that AI is replacing traditional software has been shaken by recent earnings reports from top companies.

US-listed software stocks have been under pressure for over a year due to concerns about the substitution effect of AI tools. However, Salesforce's latest quarterly report showed strong revenue and earnings growth, beating Wall Street expectations.

The company's current remaining performance obligation surged 14% year-on-year, with its net new annual order value hitting a four-year high. CEO Marc Benioff said that subscriptions had not decreased as expected, but instead increased due to customers upgrading to premium packages.

Other software stocks like Workday and CrowdStrike Holdings also reported strong results, defying the pessimistic narrative about AI's impact on traditional software.