Salesforce Results Spark Software Rally as Chamath Palihapitiya Reconsiders SaaS Views
Salesforce's latest quarterly results have left a prominent venture capitalist rethinking his views on the software-as-a-service (SaaS) sector. Chamath Palihapitiya, who had warned of a major SaaS meltdown just months ago due to artificial intelligence (AI), now believes that depressed software valuations could 'snap back'. The company's revenue grew 11% year-over-year in its second-quarter results, exceeding doubled adjusted earnings per share and raising its fiscal 2027 revenue outlook.
Salesforce CEO Marc Benioff dismissed the 'SaaSpocalypse' theme as 'nonsense', stating that AI agents still require trusted enterprise data and business context. Palihapitiya echoed this view, arguing that tight integration with systems of record will be necessary for AI models to deliver their next phase of enterprise value.
The company's results also sparked a broader software rally, with CrowdStrike, Veeva Systems, Palo Alto Networks, ServiceNow, and Fortinet all experiencing significant gains. The iShares Expanded Tech-Software Sector ETF (IGV) jumped 8%, compared to the Nasdaq-100-tracking Invesco QQQ Trust (QQQ)'s 1.4% gain.