Software’s AI trade moves from fear to opportunity

ServiceNow

01/09/2026 16:03

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
By Pranav Kiran
TORONTO, Sep 1  (Reuters Breakingviews) - Software investors have mostly been responding to AI threats. Now, they finally have cause to think about opportunities. The rise of all-powerful programming assistants like Claude Code tanked the stocks of a host of app developers, including the likes of $215 billion stalwart Salesforce CRM.N or IT helpdesk tool ServiceNow NOW.N. The few exceptions were mostly cybersecurity providers expected to do brisk business defending against malicious chatbots. The rise of self-directed artificial helpers to boost productivity, though, is finally gaining traction.
AI-powered cyberattacks will continue to prey on the minds of executives. Investigators last week published a report into a particularly unnerving hack perpetrated by OpenAI models on open-source platform Hugging Face. As tools grow more capable, such breaches may only become more common. This dark side to the technology has been a bright spot for the likes of CrowdStrike CRWD.O and Cloudflare NET.N, which provide digital defenses. Both companies have seen their revenue grow nearly 30% annually since 2022, far above the roughly 17% pace of the broader Software Equity Group SaaS Index.
Meanwhile, makers of general-purpose business applications, like Salesforce and ServiceNow, saw their stocks roughly halve from their peaks in early 2025, a period of heightened AI fears now dubbed the "SaaSpocalypse." Their argument that autonomous “agents” could use their tools, boosting productivity with fewer humans, was overshadowed by the threat that customers could simply roll their own software for cheap.
That may be changing. Salesforce last week said net new annual order value growth, a measure of new subscription bookings less cancellations, reached its highest level in four years. It was driven in part by the company’s AI offerings under Agentforce, where annualized recurring revenue of $1.5 billion beat TD Cowen analysts’ estimate. For good measure, Marc Benioff got Anthropic boss Dario Amodei on television to say his company was “not interested in destroying anyone,” an on-the-nose rebuke to the briefly pervasive belief that its Claude model would, in fact, destroy a series of industries.
Benioff and his team mentioned the companies’ new partnership, Claudeforce, roughly 20 times during Salesforce’s earnings call, in case the message didn’t sink in. The BVP Nasdaq Emerging Cloud Index, which tracks the titans of software, has finally risen back above its pre-SaaSpocalypse peak. Investors might finally be ready to consider the reward on the other side of AI risk.
             
CONTEXT NEWS
Salesforce on August 26 said revenue for the quarter ended July 31 rose 11% to $11.35 billion.
The company now expects fiscal 2027 revenue between $46.1 billion and $46.4 billion, compared with its prior outlook range of $45.9 billion to $46.2 billion.

(Editing by Jonathan Guilford; Production by Maya Nandhini)
((For previous columns by the author, Reuters customers can click on KIRAN/pranavkiran.t@thomsonreuters.com))