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 Dropbox (NASDAQ: DBX) jumped 6.3%. Is now the time to buy Dropbox? Access our full analysis report here, it’s free.
- HR Software company Paylocity (NASDAQ: PCTY) jumped 6.4%. Is now the time to buy Paylocity? Access our full analysis report here, it’s free.
- Hospitality & Restaurant Software company Agilysys (NASDAQ: AGYS) jumped 6.4%. Is now the time to buy Agilysys? Access our full analysis report here, it’s free.
Zooming In On Agilysys (AGYS)
Agilysys’s shares are quite volatile and have had 19 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 13 days ago when the stock gained 15% on the news that the company announced strong first-quarter 2026 results that surpassed analyst expectations on both revenue and profit.
The company reported revenue of $82.95 million, up 11.7% year-on-year, beating estimates of $81.59 million. Adjusted earnings per share came in at $0.63, easily topping the $0.50 analysts had predicted. Profitability was a key highlight, with adjusted operating income of $18.63 million nearly doubling expectations and the operating margin expanding significantly to 15.2% from 7.1% a year ago. Looking ahead, Agilysys provided an optimistic full-year revenue forecast of between $365 million and $370 million, with the midpoint of its guidance ahead of Wall Street’s consensus.
Agilysys is down 19% since the beginning of the year, and at $93.57 per share, it is trading 33.7% below its 52-week high of $141.12 from October 2025. Despite the year-to-date decline, investors who bought $1,000 worth of Agilysys’s shares 5 years ago would now be looking at an investment worth $1,792.
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