Software Stocks' Sell-Off May Be a Buying Opportunity, Analyst Says

Top tech analyst Dan Ives has called the recent sell-off in software stocks one of the most disconnected from business fundamentals since the late 1990s. According to Ives, Microsoft(NASDAQ: MSFT), ServiceNow(NYSE: NOW), and Salesforce(NYSE: CRM) have seen strong growth and momentum in AI-driven products.

Microsoft's revenue grew by 18% year-over-year last quarter, driven by surging demand for its Azure enterprise cloud platform and paid Microsoft 365 Copilot seats. ServiceNow reported a 23% increase in constant currency subscription revenue in the second quarter, with strong momentum in AI-related contracts.

Salesforce posted a 14% year-over-year increase in first-quarter revenue, beating analyst estimates for the second straight quarter. The company signed a record 98 deals worth over $1 million in new annual contract value, driven by demand for its AI-related products.