Software and IT Services Stocks Surge as Earnings Beats Ease AI Disruption Fears

Salesforce, CrowdStrike and Okta led a broad technology rally after stronger-than-expected quarterly results showed that artificial intelligence is creating new demand for established software platforms.

U.S. software and IT services stocks surged across the board on Thursday after several major companies reported quarterly results that exceeded Wall Street expectations and raised their financial outlooks.

At around 11:12 a.m. Eastern Time, Okta shares had jumped approximately 26%, Salesforce was up 21%, and CrowdStrike had gained 18%. The rally also spread to other software and cybersecurity companies, including ServiceNow and Palo Alto Networks. The S&P 500 Information Technology sector advanced about 2.8%, according to live market coverage from Investopedia.

The results helped ease concerns that generative AI could make traditional enterprise software less valuable. Instead, investors saw growing evidence that established software providers can integrate AI into their platforms, increase customer spending and benefit from rising demand for data management, identity protection and cybersecurity.

Salesforce delivers strong growth

Salesforce, a leading provider of customer relationship management software, reported results for its fiscal second quarter of 2027, covering the three months ended July 31, 2026.

Revenue increased 11% year over year to $11.35 billion, slightly above analysts’ consensus estimate of approximately $11.33 billion. GAAP net income reached $3.53 billion, up approximately 87% from $1.89 billion in the same quarter last year.

Adjusted earnings were $5.90 per share, more than double the year-earlier figure and well above Wall Street’s expectation of about $3.28 per share.

Demand for Salesforce’s AI and data products was one of the main operational highlights. Annual recurring revenue from Agentforce and Data 360 reached nearly $3.9 billion, representing growth of more than 210%. Agentforce alone generated more than $1.5 billion in ARR, up over 240%.

Current remaining performance obligations, an important indicator of future contracted revenue, rose 14% to $33.5 billion. Salesforce subsequently raised its full-year revenue forecast to between $46.1 billion and $46.4 billion, according to the company’s official earnings release.

Anthropic investment provides a major profit boost

Salesforce’s headline profit also received a substantial contribution from its investment portfolio.

The company recorded $2.61 billion in net gains on strategic investments during the quarter. The gain was widely linked to the increased valuation of Salesforce’s stake in Anthropic, the company behind the Claude AI models.

On a simple comparison, the $2.61 billion pre-tax investment gain was equivalent to approximately 74% of Salesforce’s reported net income. However, this compares a pre-tax gain with after-tax profit. Based on Salesforce’s disclosed after-tax impact of $2.43 per diluted share, the investment gain contributed approximately $2.0 billion after tax, or roughly 57% of quarterly net income.

This distinction is important because the investment gain is non-operating and may not recur in future quarters. Nevertheless, the increase in Anthropic’s valuation has given Salesforce an additional financial benefit from the AI boom beyond revenue generated by its own products.

Salesforce also expanded its commercial partnership with Anthropic by introducing “Claudeforce,” which connects Claude’s AI models with Salesforce’s customer data, business applications and workflows. The partnership reinforced the view that leading AI model developers may complement established enterprise software platforms rather than replace them.

CrowdStrike and Okta strengthen the rally

CrowdStrike added to the positive sentiment after reporting what management described as the strongest quarter in the company’s history.

Revenue increased 26% to $1.47 billion, while annual recurring revenue grew 25% to $5.84 billion. The cybersecurity company also raised its full-year revenue forecast to between $5.99 billion and $6.01 billion. Management said expanding AI adoption is increasing the need for companies to protect AI applications, cloud infrastructure and machine identities. CrowdStrike’s Q2 FY2027 results confirmed strong growth in both new business and free cash flow.

Okta reported an 11% increase in revenue to $805 million, while subscription revenue rose 12% to $793 million. GAAP net income climbed to $116 million from $67 million, and adjusted earnings reached $1.05 per share.

The identity-security provider also raised its full-year outlook, citing demand for technology that can identify, control and secure both human users and AI agents. Its remaining performance obligations increased 17% to $4.86 billion, according to Okta’s official quarterly report.

A changing AI narrative

The sector-wide rally represents more than a reaction to earnings beats. It reflects a potential shift in how investors view the relationship between AI and traditional software.

Rather than immediately replacing established platforms, AI is increasing demand for trusted corporate data, automated workflows, cybersecurity and identity management. Companies such as Salesforce, CrowdStrike and Okta already control critical layers of enterprise technology, giving them an opportunity to monetize AI through existing customer relationships.

However, investors should still distinguish recurring operating growth from one-time gains. Salesforce’s investment income materially boosted its headline profit, while the longer-term outlook will depend on whether Agentforce, Data 360 and other AI products can sustain rapid growth.

For now, the latest results have delivered a clear message to the market: AI may be transforming the software industry, but it is also creating powerful new growth opportunities for its largest incumbents.

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