Wall Street Learns to Love Software, Again

Forget the SaaSpocalypse! It's a SaaS renaissance (SaaSaissance, anyone?). Shares of Salesforce rocketed 23% on Thursday, leading a recovery for many of the most beaten-down software stocks, including ServiceNow, Figma and Asana, after Salesforce reported upbeat July-quarter earnings on Wednesday night. The rally signaled a striking change in sentiment for the sector, which has been slammed by worries about the impact of AI on traditional software.

Thursday’s rally extended to cybersecurity-related stocks that hadn’t been swept up in the SaaSpocalypse, including CrowdStrike (up 20.5%) and Okta (up 29%), both of which also reported earnings on Wednesday. But the Salesforce rally was what got attention. Salesforce, one of the biggest and highest-profile software names, at one point this year was down 43% from where it finished 2025. Those ugly days may be over: It finished the day down just 4% for the year.

Of course, it‘s likely that investor sentiment will change again. After all, Salesforce’s quarterly numbers weren’t that good. Revenue grew 11%, 2 points slower than for the first quarter, and if you exclude the contribution from Salesforce’s acquisition of Informatica last November, growth was only 6.4%. But Salesforce is projecting a slight pickup in the second half in organic growth, which comes from signing new business or persuading existing customers to spend more, rather than from acquisitions. And while it’s only slight, it contributed to Salesforce raising its full-year revenue projection.

It’s all about expectations, of course. Investors appear to be realizing they hugely overreacted to the threat posed by AI by selling down software stocks as much as they did. Software firms are still growing, even if the rate of expansion is coming down. As KeyBanc analyst Jackson Ader said on The Information’s TITV on Thursday, “We’re all coming around to the idea that things are going to be more durable…and we are not going away…and that’s why you see…Salesforce come out with fine but not stellar results but [you] see really outsized reaction.” Enough said.

Tech’s Deal Spree

We’re certainly no longer in Lina Khan’s America. Our scoop on Wednesday night that Nvidia had agreed to acquire Hugging Face for $12.9 billion continues a slew of acquisitions in the tech sector in the past 18 months, including Stripe’s reported $7 billion purchase of OpenRouter, SpaceX’s purchase of Cursor, Salesforce’s acquisition of Informatica and Google’s purchase of Wiz.

Given that Khan, chair of the Federal Trade Commission in the Biden administration, went to court (unsuccessfully) to stop Meta Platforms from buying Within, a tiny startup making a virtual reality app, simply on the principle that Meta shouldn’t be allowed to buy something, you can guess that most of the deals done under the Trump administration would not have gone through (at least without a big fight).

Tech companies are surely eyeing other deals, conscious that they can only be certain of another two years of a hands-off antitrust regime. (For more on this subject, see Jessica E. Lessin’s column from earlier this week.)

• Gibson Dunn, a Los Angeles–headquartered law firm well known for its litigation practice, has hired tech lawyer Jonathan Ashtor from New York law firm Paul, Weiss. The hire is the latest in a series of senior moves among the country’s largest law firms.

• Workday increased revenue for the second fiscal quarter 12.8%, a slowdown from 13.5% the company reported for the first quarter (more here).

Today on The Information’s TITV

Check out today’s episode of TITV in which we discuss Salesforce’s quarterly results and what it says about the SaaSpocalypse.