By Angela Palumbo
Salesforce and other software stocks climbed on Monday as Wall Street re-evaluated the threat artificial intelligence could pose to the sector.
The stocks have taken a beating across the board this year over fears software could be replaced by AI, bringing on a so-called "SaaSpocalypse." Even shares of the biggest names, such as Salesforce and ServiceNow, have fallen hard.
Those worries appear to be fading. The iShares Expanded Tech-Software Sector ETF rose 21% in May, its best monthly performance since October 2021, according to Dow Jones Market Data.
Software stocks also kicked off June with a major boost from Nvidia CEO Jensen Huang during his keynote address at GTC early Monday.
Huang argued AI agents -- models that complete tasks for a user following a simple prompt -- wouldn't put software companies out of business.
"There are going to be so many agents, the world is no longer limited by the number of people," Huang said. "Therefore, those agents are gonna use more tools than ever. This is actually an incredible time to be a software company."
The iShares Expanded Tech-Software Sector ETF rose 0.6% on Monday while the S&P 500 was up 0.4%.
Salesforce, a stock that has been closely watched amid the software rut, surged 10% and was on pace for its largest percentage increase since Dec. 4, 2024. The stock was also the best performer in the Dow Jones Industrial Average on Monday, while the index was down 0.3%.
Its shares have dropped 21% over the past 12 months as some investors worry that customers could use coding agents to make their own custom versions of Agentforce, Salesforce's own AI agent platform.
Software stocks also got a boost from earnings reports.
Workday jumped 5.2% on May 22 after the enterprise-management software company reported better-than-expected subscription revenue. Management also expressed confidence in the company's ability to navigate an AI future.
Shares of Okta soared 30% on May 30 after earnings as analysts cited confidence in the company's future due to its own AI products.
The stock moves signal that the worst may be behind the sector.
Write to Angela Palumbo at angela.palumbo@dowjones.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
June 01, 2026 15:36 ET (19:36 GMT)
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