US software stocks scale fresh 2026 highs as AI disruption worries fade
US software stocks are touching fresh 2026 highs, supported by a sharp rise in earnings expectations, which according to several analysts indicate that fears over AI-led disruption in the sector were largely overstated.
US software stocks reached new 2026 heights as concerns over AI disruption receded, according to market data. The S&P 500 software and services index surged 1.3 percent to its highest level since November 2025, following its biggest quarterly gain in July-September since 2020. Strong earnings from firms like Salesforce, ServiceNow and Accenture, along with collaborations with AI labs, contributed to the sector's recovery initiated since mid-June.
Cybersecurity stocks, including Crowdstrike, Fortinet and Palo Alto Networks, led the charge with triple-digit yearly gains, as companies ramp up cybersecurity investments. Adam Turnquist, strategist at LPL Financial, noted that AI is more of a facilitator than a disruptor for software companies. The software index's 2026 annual earnings growth projection has risen to 20.6 percent, up from 13.8 percent in early March.
While the sector has seen a 5 percent increase this year, the Philadelphia Semiconductor index, dominated by US chipmakers, has surged 87.5 percent in 2026, yet remains far from its peak. Analysts now term the earlier fear of AI-driven "SaaSpocalypse" as exaggerated, as companies have proven more adept at leveraging AI for application development.
However, risks remain, as AI's rapid advancement may challenge traditional software models in the latter half of 2027.
Written by urgent.news from Channel News Asia's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
This story
This is one outlet's version. Read the fullest account.
- US software stocks scale fresh 2026 highs as AI disruption worries fade channelnewsasia.com
