Software Was the Market's Big Laggard This Year. Snowflake's Blowout Might Be the Spark That Changes That.
2026-05-31 16:31:00 ET
Software stocks have had a brutal first five months of 2026, with many of them falling sharply even as the S&P 500 has risen. Snowflake (NYSE: SNOW) , despite management describing its artificial intelligence (AI) data cloud as a beneficiary of the AI boom, has seen its shares fall alongside other software stocks this year amid investor concern that AI would disrupt software companies overall. Indeed, at one point in April, the stock sat more than 50% below where it had traded a year earlier. But the stock is rebounding now. In fact, the stock is now up sharply year to date, helped mainly by the market's reaction to the tech company's better-than-expected earnings report last week.
But is this news about more than Snowflake? Could there be more software companies that, like Snowflake, will actually benefit more from AI than they will be hurt by it? Snowflake's latest report is the loudest evidence yet that the market may have had it backward.
Image source: Getty Images.
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