Six months ago, Wall Street collectively sentenced 'AI killing software' to death, but this week’s earnings season tore up the verdict. After OKTA’s earnings report, the stock skyrocketed +29% in a single day, CRM surged +23%, NOW jumped +10%, and SNOW announced a $6 billion partnership with AWS, shooting up +36% in one day. The IGV software ETF soared 21% in a single month this summer, marking its strongest month since the dot-com bubble burst in 2001. The irony? The market originally thought Agents would bypass SaaS, but the more Agents there are, the more companies need data platforms, observability, identity governance, and cloud security. AI isn’t killing software—it’s forcing companies to buy more software. 8/26 Pre-earnings → Peak → 9/4 Close OKTA +28.7% → +26.9% (held steady) CRM +28.6% → +26.1% (held steady) NOW +17.6% → +12.3% SNOW +13.0% → +6.9% MDB +11.6% → −9.2% (spiked and then reverted) DDOG +6.7% → −6.5% (same story) ⚪ SMH Semiconductor ETF only +2%—money is rotating from hardware to software. Three takeaways: 1. Goldman Sachs says 'AI hardware hype has peaked, profits are shifting from hardware to software.' M&A activity in the primary market is already reflecting this: U.S. software industry deal volume reached $364 billion this year, up 98% YoY. 2. But software stocks are diverging internally—despite benefiting from AI, OKTA and CRM managed to hold onto 25%+ gains, while MDB and DDOG gave back their +11% gains within a week. 3. Institutional positioning is still at 6% (a new low since 2019), meaning there’s still fuel left for a squeeze. Getting the thesis right but picking the wrong stocks won’t make you money. The real winners in this wave are the software companies that can reliably turn AI into 'paying customer outcomes'—not the ones just riding the AI hype.