AI Shift Drives Software Stocks to Rebound in Q3

The third quarter saw software stocks make a significant rebound in the US stock market.

According to Jim Cramer, this was driven by investors shifting their view towards AI as a growth engine for companies like Salesforce and Microsoft, rather than a threat to their business.

Salesforce, which rose 46% during the quarter, unveiled 'Cloudforce,' linking Anthropic's Claude to its data. The company also reported strong quarterly results and continued buying back shares using its lower stock price.

Cramer said he saw Salesforce rising further and pointed to Microsoft as another stock with a rally that was only just beginning. He noted strong demand for Copilot, faster growth in Azure, and data centre investment starting to deliver results.