Salesforce CEO Marc Benioff can forget about the so-called "doom loop" narrative for software. What’s unfolding now is a full-blown software revival, with some cheekily calling it the "renaissance era" for the sector. After the company delivered a stellar July-quarter earnings report after Wednesday's close, its shares skyrocketed 23% on Thursday, sparking a powerful rebound across a swath of previously beaten-down software names, including ServiceNow, Figma, and Asana.
This latest rally marks a major turning point in sentiment toward the tech sector's software cohort, which had been under pressure due to persistent fears that artificial intelligence would fundamentally disrupt traditional software businesses. The Thursday upswing also lifted cybersecurity stocks that had avoided the "software apocalypse" sell-off: CrowdStrike jumped 20.5%, and Okta surged 29%, with both companies having also reported earnings on Wednesday.
Yet the spotlight remains fixed firmly on Salesforce. As one of the largest and most recognizable players in the industry, its share price had at one point slid 43% from its end-of-2025 closing level. But by Thursday's close, its year-to-date decline had narrowed to just 4%, suggesting that the deeply troubled phase may very well be behind it. Naturally, investor sentiment could easily flip again, but the momentum is undeniable at the moment.
Looking at the numbers pragmatically, the quarter itself wasn't exactly spectacular. Revenue grew 11% year-over-year, a two-percentage-point deceleration from the previous quarter. Excluding the contribution from the Informatica acquisition last November, organic growth came in at just 6.4%. However, management projected that organic growth would pick up slightly in the second half of the year, driven by winning new customers and encouraging existing ones to expand spending, rather than relying on further acquisitions. It was this very guidance that prompted the company to raise its full-year revenue outlook.
At its core, this entire situation is a game of expectations. Investors are realizing that the market may have overcorrected, selling off software stocks in a panic over the AI threat. Software companies are still growing; they're just doing so at a more measured pace. KeyBanc analyst Jackson Ade noted on Thursday that a consensus is emerging that enterprise software is far more resilient than many feared, and that it won't simply vanish. That explains why a merely decent, rather than dazzling, earnings report from Salesforce could trigger such a violently positive response. That assessment rings true.
The consolidation wave in the tech sector is also building fresh momentum, and the regulatory climate is a far cry from the Lina Khan era at the Federal Trade Commission. Nvidia has announced a $12.9 billion deal to acquire Hugging Face, adding another blockbuster to a series of major acquisitions across tech over the past 18 months. Other significant transactions include reports of Stripe spending $7 billion on OpenRouter, SpaceX picking up Cursor, Salesforce's acquisition of Informatica, and Google's purchase of Wiz.
Former FTC Chair Lina Khan, who attempted to block Meta's acquisition of VR startup Within through the courts (ultimately unsuccessfully), operated under the core doctrine that big tech companies shouldn't be allowed to freely absorb startups. Given that stance, it's fair to say that most of the M&A deals now being signed off during the Trump administration would likely have faced intense regulatory pushback, or been blocked outright, under her leadership. The major tech titans are still scouting for new takeover targets, fully aware that this lenient antitrust window may only be open for roughly the next two years.