Software stocks strike back, as Jensen Huang throws fuel on the fire with comments at Computex
The Nvidia CEO said that it’s an “incredible time” to be a software company, as Nvidia unveiled the RTX Spark — a new superchip developed in collaboration with Microsoft which Huang promises will "reinvent" the PC.
Software’s back, baby.
If Snowflake’s strong print and MongoDB’s insane heartbeat move post-earnings on Thursday were the signs of a pulse, then Okta’s blowout beat was the defibrillator shock that sparked the entire sector back to life.
After being hammered for much of this year, with every iteration of Claude code starting a fresh wave of doom-mongering, software struck back at the end of last week, with the S&P 500 Software & Services sector cranking out a 6.4% gain on Friday — its best one-day performance since the bounce back from the Liberation Day tariff announcements of 2025.
While Okta may have been the spark, Friday’s sharp re-rating of the industry is more likely due to the growing body of evidence that the AI boom actually might benefit the growth and margins of at least some software stocks for at least some time.
Ben Graham once said, “In the short run, the market is a voting machine, but in the long run, it is a weighing machine.” That still holds true, but in modern markets, the timeline for when we start the weighing profits bit has shifted, and not everyone’s opinion counts as one vote. Nvidia’s CEO, Jensen Huang, gets a lot of votes. His comments have crushed, and then revitalized, quantum stocks in the past, so it’s telling that in a speech at Computex in Taiwan yesterday, he said it’s an “incredible time” to be a software company.
He elaborated, adding:
“A lot of people have said, you know Jensen, agentic AI is coming, therefore all of the software companies are going to go out of business. I said: it’s exactly the opposite. Because there are going to be so many agents, the world is no longer limited by the number of people. Therefore, those agents are going to use more tools than ever.”
That has jolted software names up in the premarket once again on Monday, with ServiceNow, Asana, Salesforce, and Atlassian all among the early leaders.
If, and it is a big if, the software momentum holds, there are a number of high-profile software stocks that still have a long way to run to get back to their 52-week high. Oracle is the biggest name on the list of stocks that gained at least 10% but remain more than 30% from their all-time high.
Another giant, Microsoft — which has ceded ground to peers like Alphabet, mostly for two reasons: its software exposure and its OpenAI exposure at a time when Anthropic has been on a heater — had its best day in over a year on Friday, narrowing a valuation gap to arguably its chief rival that just one year ago was deeply in its favor.
Microsoft is up another 2.7% in the early price action on Monday, fueled by Nvidia’s announcement of "NVIDIA RTX Spark," a new superchip that will purportedly power the world’s first Windows PCs that are "purpose-built for personal agents." Huang pitched the product as a total reimagining of the personal computer; to be agent-first, rather than app or programme-first.
Alongside the chip reveal, Microsoft announced what it called the "most powerful and efficient thin-and-light Windows PCs ever." Starting this fall, RTX Spark will power a full range of Windows laptops, including ASUS, Dell, HP, and Lenovo, as well as a brand new Microsoft Surface (which has been given the "ultra" treatment by the naming department... better than pro max plus, I suppose).
