Software stocks’ recovery accelerated on Monday after Nvidia Chief Executive Jensen Huang pushed back on concerns that artificial intelligence could undermine the software industry.
The comments were a fresh boost to a sector that had already begun to rebound, with investors buying momentum after months of intense selling.
ServiceNow (NOW) rose 10% in pre-market trading, IBM rose about 11% and Salesforce rose more than 6%.
The gains built on Friday’s gains, when ServiceNow soared more than 14%, IBM rose more than 12% and Salesforce rose about 8.5%.
Nvidia chief expresses support for software division
Speaking at the Computex conference in Taiwan, Huang directly challenged the narrative that has focused on software evaluation since the advent of agent-based AI systems.
“A lot of people said, ‘Jensen, AI is coming. Agent AI is coming. So all the software companies are going to go out of business.’ I said that’s quite the opposite,” Huang said in his keynote.
Agenttic AI refers to systems that can perform tasks and workflows with minimal human intervention.
While some investors are concerned that such systems could replace existing software applications, Huang argued that increased use of AI agents will actually increase demand for software tools.
“There will be more agents working, so they will have more tools than ever before,” he said.
“This is a really great time to be a software company, but the software needs to be presented to agents in a way that they can use it.”
Huang also dismissed suggestions that AI will reduce jobs across the software industry.
“The number of engineers, software engineers, is actually increasing. People say AI will reduce jobs, which is complete nonsense. That’s why more software engineers are being hired,” he said.
Investors come back after crash
Software stocks were among the biggest casualties of the AI-driven market rotation earlier this year, as investors moved capital into semiconductor and infrastructure companies expected to directly benefit from a surge in AI spending.
The concern was that AI assistants and autonomous agents could eventually replace certain software functions, reducing demand for traditional enterprise software platforms.
But recent trading suggests investors are reevaluating those assumptions.
ServiceNow stock is up about 36% over the past month, while IBM is up about 28% over the same period.
Despite the recovery, many software names remained flat or negative throughout the year.
There are also signs of recovery in the broader software sector.
The iShares Expanded Technology Software Sector ETF (IGV) is up about 17% over the past month, although it is still down about 4% in 2026.
New strengths are emerging as market participants increasingly focus on how software companies can benefit from AI adoption, rather than being chased by it.
AI goes from threat to opportunity
Huang’s comments coincided with Nvidia’s announcement of a new RTX Spark PC chip designed to bring AI capabilities directly to laptop and desktop computers.
The chip is part of a broader effort between Nvidia and Microsoft to reimagine personal computing around AI-driven applications.
The effort comes after a three-year collaboration aimed at “reinventing the PC” for the AI era, according to Huang.
Industry observers believe that local AI processing could accelerate the adoption of AI agents and create new opportunities for software vendors who can integrate their systems and products.
This shift in sentiment is increasingly influencing Wall Street’s outlook for enterprise software companies.
Analysts see long-term winners emerging
Recent analyst actions suggest increased confidence in certain software names that are likely to benefit from the rise of agent AI.
Bank of America on May 18 reinstated its coverage of ServiceNow with a buy rating and $130 price target, arguing that its workflow platform has the potential to become a central orchestration layer for autonomous AI agents.
Because ServiceNow is tightly integrated across IT, employee, and customer workflows, it is well-positioned to serve as a “command tower” for enterprise AI operations, the brokerage said.
Bank of America’s thesis is based on the belief that platforms that can coordinate AI-driven actions across the organization will emerge as key beneficiaries of the next phase of AI adoption.
IBM has also received positive attention from analysts.
Barclays recently initiated coverage of the company with an Overweight rating and $350 price target, suggesting significant upside from recent levels.
Analyst Raimo Renshaw said IBM’s software business enjoys a very stable customer base concentrated in large, regulated industries where switching costs remain high.
Barclays noted that nearly half of IBM’s revenue and the majority of its profits come from software, and that contribution is expected to grow further as software continues to outperform other parts of the business.
The latest rally suggests investors may be warming to the view that software companies will play a key role in the AI economy, not as victims of technological disruption but as essential infrastructure providers that support the operation of autonomous systems at scale.
