What Happened?
A number of stocks jumped in the afternoon session after Snowflake's impressive earnings results provided clearer evidence that the "SaaSpocalypse" — a rolling selloff that had erased approximately $2 trillion from software market values since late 2025 on fears that AI would make subscription software obsolete — had been overstated for platforms sitting at the centre of AI workflows.
Snowflake surged 35%, its best single day ever, after reporting that AI accounts on its platform jumped from 9,100 to 13,600 in a single quarter, product revenue grew 34%, and full-year guidance was raised by $180 million. The read-through was immediate. ServiceNow gained 5%, Palantir rose nearly 6%, Oracle and Microsoft each added roughly 3%, and a broad wave lifted the iShares Expanded Tech-Software Sector ETF (IGV).
The SaaSpocalypse thesis rested on a simple fear: that autonomous AI agents would replace per-seat software licences, hollowing out established SaaS business models. Snowflake's results inverted that logic directly. Instead of AI displacing its platform, AI drove more consumption of it. CFO Brian Robins described Cortex Code as creating a "step function change" in AI revenue potential, and said it was the single largest driver of the full-year guidance raise. Enterprises are not replacing data platforms with AI; they are using AI to generate more workloads that run on those same platforms.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Cloud Monitoring company Dynatrace (NYSE: DT) jumped 4.6%. Is now the time to buy Dynatrace? Access our full analysis report here, it’s free.
- HR Software company Paycom (NYSE: PAYC) jumped 4.3%. Is now the time to buy Paycom? Access our full analysis report here, it’s free.
- Advertising Software company Zeta Global (NYSE: ZETA) jumped 4.4%. Is now the time to buy Zeta Global? Access our full analysis report here, it’s free.
Zooming In On Dynatrace (DT)
Dynatrace’s shares are somewhat volatile and have had 14 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 6 days ago when the stock gained 4.7% on the news that Treasury yields cooled and risk-on rotation lifted AI-linked growth names, helping the sector recover from the previous day's Intuit-driven sell-off.
SaaS companies (Salesforce, ServiceNow, Workday, Snowflake, MongoDB, Datadog) are the textbook example of long-duration cash flows: they earn revenue over multi-year contracts with high renewal rates, which makes them extremely sensitive to the discount rate.
A ten-basis-point drop in the 10-year yield can lift SaaS valuations 5-10% by itself, because these stocks trade on EV/forward-revenue multiples that move directly with rates.
The combination of cooling yields and Iran peace progress also calmed fears that AI commoditization (yesterday's Intuit thesis) is universal across SaaS. Investors appeared to be sifting the market for SaaS companies whose moats AI extends, a healthier setup than the previous day's blanket sell-off.
Dynatrace is down 4.4% since the beginning of the year, and at $40.49 per share, it is trading 28.5% below its 52-week high of $56.64 from July 2025. Investors who bought $1,000 worth of Dynatrace’s shares 5 years ago would now be looking at only $782.47.
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