Software ETF Rebounds Nearly 40% As Snowflake, Palo Alto Beat Estimates

According to CNBC, the software sector has recovered nearly all of the market value it lost earlier this year during the AI-driven selloff dubbed the "SaaSpocalypse," with the IGV software ETF up nearly 40% from its April lows and State Street's XSW software ETF reaching a new high at the end of August. Jefferies analyst Brent Thill said frontier AI labs are more likely to partner with leading vendors than build the full stack themselves, while systems of record, proprietary data and sticky workflows remain durable advantages. He said data platforms and cybersecurity look better positioned than apps at this stage, and named Snowflake, Dynatrace, Palo Alto Networks and Okta among the firms it favors. Snowflake rose 22% Wednesday after second-quarter results beat estimates, posting adjusted earnings of 62 cents per share on revenue of $1.55 billion and lifting full-year product revenue guidance. Palo Alto Networks also topped fiscal fourth-quarter estimates, reporting adjusted earnings of $1.02 per share on revenue of $3.41 billion.