What Happened?
A number of stocks jumped in the afternoon session after software stocks extended their rally, carrying momentum from one of the sharpest sector reversals of 2026.
The iShares Expanded Tech-Software ETF closed May up 21%, its best monthly performance since October 2001, after Snowflake's Q1 results and Dell's Q1 print over two consecutive evenings combined to break the "SaaSpocalypse" narrative that had driven enterprise software stocks 20-40% below their highs. Snowflake's revenue grew 34% to $1.39 billion, AI accounts jumped from 9,100 to 13,600 in a single quarter, and Dell confirmed $16.1 billion in AI server revenue (up 757%) against a $51.3 billion committed backlog. The combined message was that AI is accelerating enterprise software demand, not displacing it.
Nvidia CEO Jensen Huang's Computex keynote in Taipei framed agentic AI (autonomous systems executing tasks across enterprise infrastructure) as the defining platform shift ahead, directly validating the demand case for the software layer that governs, secures, and orchestrates those agents. ServiceNow rose 10%, bringing its two-session gain to 26% from the May 28 close of $108. Okta held its 30% post-earnings surge, with its identity platform increasingly positioned as infrastructure for enterprise AI agent deployment. MongoDB sustained its post-Q1 momentum after 25% revenue growth and a fourth consecutive quarter of Atlas growth at or above 29%. CrowdStrike held near its 52-week high of $731 ahead of its June 3 earnings.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Document Management company Box (NYSE: BOX) jumped 5.2%. Is now the time to buy Box? Access our full analysis report here, it’s free.
- HR Software company Asure Software (NASDAQ: ASUR) jumped 4.8%. Is now the time to buy Asure Software? Access our full analysis report here, it’s free.
- Payments Software company Flywire (NASDAQ: FLYW) jumped 5%. Is now the time to buy Flywire? Access our full analysis report here, it’s free.
Zooming In On Box (BOX)
Box’s shares are not very volatile and have only had 6 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 14 days ago when the stock gained 2.6% on the news that investor confidence rebounded as markets softened their view on the existential threat AI poses to traditional software companies.
After a period of significant underperformance, dubbed the "SaaS Rout of 2026," where software stocks traded at a discount to the S&P 500, the prevailing fear that AI would completely disrupt and replace traditional Software-as-a-Service (SaaS) companies began to subside. Experts noted that these companies possess significant advantages, including established enterprise relationships, vast amounts of proprietary data, and deep integration into customer workflows, which AI is unlikely to erase overnight. This changing perspective suggests a potential re-rating for the sector as investors realize these companies may be well-positioned to integrate and leverage AI rather than be replaced by it.
Box is flat since the beginning of the year, and at $28.71 per share, it is trading 25.5% below its 52-week high of $38.55 from June 2025. Investors who bought $1,000 worth of Box’s shares 5 years ago would now be looking at an investment worth $1,198.
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