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:
- Finance and Accounting Software company Workday (NASDAQ: WDAY) jumped 4.7%. Is now the time to buy Workday? Access our full analysis report here, it’s free.
- Healthcare And Life Sciences Software company Doximity (NYSE: DOCS) jumped 4.7%. Is now the time to buy Doximity? Access our full analysis report here, it’s free.
Zooming In On Workday (WDAY)
Workday’s shares are very volatile and have had 20 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 7 days ago when the stock dropped 3.7% on the news that Intuit's plunge spread across the sector and reignited the thesis that generative AI is structurally undermining the legacy SaaS business model.
Intuit Inc (NASDAQ: INTU) shares opened about 19% lower despite the company posting fiscal third quarter results that topped Wall Street expectations, as investors focused on a weaker long-term outlook for TurboTax and plans to cut roughly 17% of its workforce.
The damage was three-layered: TurboTax revenue guidance was cut even as the overall outlook was raised; 17% of the workforce (~3,000 jobs) was eliminated under an "AI restructuring" banner; and KeyBanc, Stifel, and RBC Capital all cut price targets. Intuit's value historically came from the "guided help" layer: wizards walking users through tax filing, bookkeeping, marketing automation. Generative AI threatens to commoditize exactly that layer. When even a beat-and-raise print can't support the stock, the market is pricing a structural rerating, and the contagion spreads to similar SaaS names.
Workday is down 36.7% since the beginning of the year, and at $130.29 per share, it is trading 48.5% below its 52-week high of $252.90 from June 2025. Investors who bought $1,000 worth of Workday’s shares 5 years ago would now be looking at only $569.67.
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