IT之家 News on October 7: According to Reuters, boosted by sharply raised earnings expectations, US software stocks are hitting a 2026 phase high; a number of analysts believe that the market's earlier concerns that artificial intelligence would disrupt the entire software industry were largely exaggerated.
IT Home noted that the S&P 500 Software & Services Index rose 1.3% on Tuesday, reaching its highest level since 11/2025. Prior to this, the index posted its largest quarterly gain since the second quarter of 2020 in the 7-9 month quarter.
Software companies such as Salesforce, ServiceNow and Accenture delivered impressive earnings results, and together with various partnerships between companies and AI labs, this fueled a recovery rally in the sector since late June.
Cybersecurity stocks performed especially prominently. Crowdstrike, Fortinet and Palo Alto Networks all posted triple-digit percentage stock gains this year; in the AI era, companies continue to invest heavily in cybersecurity.
Adam Turnquist, chief cross-asset strategist at LPL Financial, said: "For many software companies, artificial intelligence is more of an enabler than a disruptor. We are now witnessing a trend shift: the software sector is reclaiming its position as the market's leader. We believe that in the coming period, the software sector has a chance to outperform the semiconductor sector."
The software sector index is up 5% cumulatively this year; the Philadelphia Semiconductor Index, which brings together many US chipmakers, has surged 87.5% in 2026, although the index has now fallen back noticeably from its previous high.
Data from LSEG shows that the software industry's expected annual earnings growth rate for 2026 has climbed from 13.8% at the end of month 3 to 20.6%.
From late month 1 to hitting a low in month 4, the software sector once drew down more than 26% cumulatively. At that time the market experienced a round of selling, known in the industry as the "SaaSpocalypse"; investors were then concerned that enterprises could in the future use artificial intelligence to develop applications in-house themselves, no longer needing to purchase external SaaS software.
Analysts now say the initial panic was not supported by actual evidence.
Rebecca Wettemann, CEO of tech research firm Valoir, said: "The so-called collapse of the SaaS industry has not come anywhere near as quickly as some on Wall Street previously envisioned." She added that as artificial intelligence moves from experimentation to practical application, software vendors report that customer purchasing demand continues to grow.
Even so, this rapidly iterating new technology is still reshaping business models, and industry risks have not entirely disappeared.
Brian Mulberry, chief market strategist at Zacks Investment Management, believes the real test for software stocks may come in the second half of 2027; by then, more data center computing capacity will come online, and AI code generation tools may deal a stronger blow to traditional software vendors.