Software Stocks Roar Back to Life After Salesforce's AI Boost

Software stocks have staged a remarkable recovery after being hit hard by market downturns earlier this year. The State Street Software and Services ETF, which tracks about 130 software and IT stocks, rose 5.2% on Thursday to reach an all-time high.

The fund's holdings include several key SaaS companies, such as ServiceNow, Workday, and DocuSign, that had taken a hit during the 'SaaSpocalypse' in February.

However, Salesforce's second-quarter earnings report released after the close on Wednesday provided a much-needed boost to investors. The company's announcement of an expanded partnership with Anthropic, which was seen as a sign that AI would complement rather than disrupt its business, sent shares soaring 22.6% and brought them closer to their pre-SaaSpocalypse levels.

Evercore analysts described the outcome as a 'better together' scenario, suggesting that AI and Salesforce's core offerings could work in tandem to drive growth.