U.S. software stocks rebounded strongly, with Oracle, which had been cut in half, soaring nearly 10%, the largest gain since September.

# Zhao Ying

Wall Street has pushed back hard against the “doom narrative” for the software industry, arguing that enterprises will not easily abandon their existing core systems and that software giants remain irreplaceable.

D.A. Davidson analyst upgraded Oracle’s rating, stating bluntly that “software is not dead” and that enterprises will continue to pay for Oracle’s products.

In addition, the surge in capital spending by tech giants has boosted market confidence, with analysts believing at least part of this spending will flow to software companies.

U.S. software stocks rebounded sharply overnight, as Wall Street analysts spoke out in unison to refute the “doom theory” that artificial intelligence will disrupt the software industry, calling excessive pessimism overdone.

Leading stocks such as Oracle surged, while pledges of increased capital spending from tech giants also lifted investor sentiment.

The software sector strengthened broadly. The iShares Expanded Tech-Software Sector ETF rose 3% on Monday, after plunging roughly 28% from its peak, as markets feared AI would take over traditional software functions and upend revenue models.

Dan Ives, an analyst at Wedbush Securities, called the recent “doom” narrative around software stocks “extremely exaggerated” and added Salesforce and ServiceNow to the firm’s AI 30 list.

Oracle jumped as much as 12% intraday — its biggest intraday gain since September 10 — and closed nearly 10% higher.

Gil Luria at D.A. Davidson upgraded the stock from Neutral to Buy, declaring plainly that “software is not dead.”

He said enterprises will keep paying for Oracle’s products, which “cannot be casually replaced by coding.”

Separately, Amazon pledged to spend $200 billion this year on data centers, chips and other infrastructure, helping ease worries about AI’s threat to software.

Some investors are betting that a combined roughly $650 billion in AI-related spending from Amazon, Alphabet, Meta and Microsoft will flow at least partially to software firms.

## Wall Street pushes back hard against the “doom narrative”

Several analysts spoke out aggressively on Monday to push back against pessimistic claims that the software industry faces an existential crisis.

Ives at Wedbush said in a Sunday note that markets were pricing software companies for a “doom scenario,” which he called “extremely exaggerated.”

He noted customers are unlikely to risk their data to accelerate AI adoption until migration projects become less complex and risky.

Management at Monday.com echoed that view on its earnings call Monday.

Although the stock plunged 20% on weaker quarterly and full-year revenue guidance, co-founder and co-CEO Eran Zinman said customers still love their product and are figuring out the best way to use AI.

“The best way for them is to use the systems they already have, where most of their data, context and workflows live,” he said.

Victoria Fernandez, chief market strategist at Crossmark Global Investments, believes AI and software companies can “coexist up to a point — the question is how much pricing power these companies retain.”

She added that investors could “test the waters” with companies that have sold off sharply but boast strong balance sheets.

## Oracle bounces sharply but remains far below highs

Despite Monday’s surge, Oracle’s stock is still down roughly 50% from its peak last September and about 20% so far this year.

D.A. Davidson took a more upbeat view of the company’s partnership with OpenAI, the developer of ChatGPT, after markets had questioned OpenAI’s lack of profitability and need for rapid growth to cover massive spending commitments.

“We are now more constructive on OpenAI, based on its strategic shifts, new frontier models, pressure on Google competitor from its recent rise, and progress on funding,” Luria wrote.

To meet contract demand from its largest cloud customers, including AMD, Meta and NVIDIA, Oracle plans to raise $45–50 billion this year to build additional capacity.

However, Ben Reitzes at Melius Research noted Monday that Oracle “doesn’t generate cash flow, and there’s no guarantee OpenAI beats Anthropic and Google.”

He said he admires that Oracle is “going all-in here, but debt and equity could be a headwind for a while.”

## Big Tech spending lifts sector confidence

Surge pledges of capital spending from major tech firms became a key catalyst for the software rebound.

Amazon’s promise to invest $200 billion in data centers, chips and other equipment this year helped lift market sentiment on Monday.

Some investors believe the combined roughly $650 billion in AI tool spending by Amazon, Alphabet, Meta and Microsoft will benefit software companies, providing support for the beaten-down sector.

Besides Oracle, other software leaders have been hammered.

Salesforce is down roughly 26% year-to-date, while ServiceNow has fallen 32%.

The Tech-Software Sector ETF, which includes heavyweights such as Microsoft and Palantir, has dropped 20% in 2026 but rebounded 3% on Monday, signaling healing investor sentiment.

Source: Wall Street News

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