US Funds Rotate Into AI Software as Snowflake Lifts Q2 Revenue View to $1.42 Billion
Updated
Updated · tradingkey.com · May 29
US Funds Rotate Into AI Software as Snowflake Lifts Q2 Revenue View to $1.42 Billion
10 articles · Updated · tradingkey.com · May 29
Snowflake’s results helped spark a broad move into AI application stocks on May 29, with ServiceNow up 12.79%, Asana 11.71%, Atlassian 9.03%, Palantir 8.96% and Salesforce 8.09%.
The shift followed evidence that AI is generating real software revenue: Snowflake said Cortex Code and Snowflake Intelligence are boosting demand and raised fiscal Q2 product revenue guidance to $1.415 billion-$1.420 billion from expectations near $1.37 billion.
That eased fears of a "SaaS Apocalypse" in which new AI tools would displace traditional software vendors, reviving interest in a sector that had badly lagged the market despite lower valuations and lighter positioning.
Since the March 31 rebound, the Nasdaq has gained about 30% and the Philadelphia Semiconductor Index 80%, while AI application stocks rose only 18%, leaving room for capital to rotate out of AI hardware and into data and software names.
With the 'SaaS Apocalypse' averted, what new AI-driven risks now threaten software investors' returns?
As the AI hardware boom fades, which niche software markets are set to capture the real profits?
The chip stock party is over, but is a hidden AI hardware 'supercycle' just beginning elsewhere?