It’s software spooky season… and misery loves company.
Investors have not had a lot of time for software stocks in 2026. Every few weeks, an Anthropic-shaped grenade is lobbed toward the likes of Workday, Salesforce, Atlassian, ServiceNow, Adobe, or Figma.
Whether you make dashboards, CRMs, design tools, or run an HR platform, if it’s built on code, the market thinks there’s a decent chance that at least one of the four C’s — Claude, Codex, Copilot, or Cursor — is going to blow a hole in your business model. Or, to be more accurate: someone using one of those coding tools will.
There was a brief reprieve when the world was hurtling toward energy disaster, with investors suddenly seeing their non-energy-exposed cash flows as useful once again. However, with the geopolitical situation seemingly no longer a major threat — at least from a markets perspective, that is, as the S&P broaches new highs on an almost daily basis — the focus is back on software.
So, it was a big test for the space then when ServiceNow stepped up to the plate yesterday, with its Q1 numbers set to be heavily scrutinized for any signs of AI-related weakness.
In a normal quarter, revenue that came in $20 million ahead and adjusted EPS that came in on the number might be broadly shrugged off, but ServiceNow is being aggressively dumped in the premarket, down 13% at the time of writing. And misery loves company in the 2026 software world, which is why peers like Workday, Atlassian, HubSpot, Salesforce, and Intuit are among the worst performers in the early action on Thursday.
Given the price action of the last few months, that’s hardly surprising. Increasingly, the fate of many of these high-profile software names on any given day is mostly tied to what the IGV software ETF is doing. The average correlation between NOW, TEAM, WDAY, CRM, ADBE, FIG, and IGV is now north of 0.8.
So, what exactly was ServiceNow’s great transgression? The main culprit was a miss on margins, with the company reporting adjusted gross profit margins of 79.5%, about 1 percentage point light vs. what Wall Street was expecting. The company also said it was cutting its full-year subscription adjusted gross margin; previously, the company expected 82%, now it sees just 81.5% (25 bps of which was attributed to an acquisition). That half a point cut was seemingly all the market needed to re-evaluate things on a more structural basis, with investors ignoring the fact that the company now expects $1.5 billion in AI software sales in 2026, up from $1 billion previously.
The S&P 500 gained for the ninth straight week, its longest winning run since 2023.
History suggests that BlackBerry does extremely well when 1) it’s considered to be pioneering a transformative technology, or 2) there’s widespread retail enthusiasm for stocks.
If you squint (or dream), you could argue that both are going on right now.
Shares of the once-upon-a-time smartphone giant are up more than 160% over the past three months. The only times the shares have had a hotter run of form than this are at the tail end of the dot-com bubble, and in early 2021 when was it part of the meme stock craze headlined by GameStop.
Let’s start with the easy part first — here’s Scott Rubner, head of equity and equity derivatives strategy at Citadel, on retail’s significant footprint in the shares’ rally:
“Retail traders are the new price setters in the market. May volumes across our retail cash equities and options platforms are currently tracking at record levels. Daily volumes on our cash platform are setting new highs and are on pace to finish nearly ~10% above the previous record established during the January 2021 meme-stock era.”
And then there’s the harder part, part of the story that the traders bidding up BlackBerry now are dreaming about: the QNX division, which offers software that the company is positioning as an operating system for robots.
QNX’s software has early uptake in the field of autonomous driving, with BlackBerry eyeing a much more widespread role: in April, it announced a partnership to deploy this technology on Nvidia’s robotics platform. Nvidia’s Jensen Huang, for his part, has long been calling for agentic AI adoption to be followed by physical AI (i.e., robots).
In a QNX press release unveiling a report this week, the company argued that software, not hardware, is the real problem in terms of making sure robotics works.
I supposed it would be poetic, in a way, if the company at the leading edge of the smartphone revolution also plays a big role in the proliferation of robotics.
Micron and Sandisk both hit fresh all-time highs in early trading after Susquehanna bestowed new Wall Street-high price targets on the two memory stocks.
Analyst Mehdi Hosseini upped his view on the former to $1,750 from $600, and to $3,250 from $2,000 for the latter.
“Supply is now expected to remain tight through 2027, sustaining elevated margins and thus warranting valuation re-rating,” he wrote, per Bloomberg.
It’s the fifth time in the past year that the average price target on Micron has gone up by more than 10% in a week. UBS’s Tim Arcuri more than tripled his price target on Micron earlier this week, and has already lost the title of “most bullish.”
But even as analysts are tripping over themselves to raise their price targets on these stocks, the ferocity of the rally in Micron has outpaced their best efforts.
The high-bandwidth memory specialist traded at a record premium to the consensus Wall Street price target this week, based on data going back to 2008.
Okta shares are surging in early trading Friday after the identity security provider posted Q1 fiscal 2027 financial results that exceeded Wall Street estimates. The strong results are fueled by accelerating corporate demand for cybersecurity software, as well as the deployment of autonomous AI systems.
Key numbers:
Adjusted earnings per share of $0.91 compared to analysts’ estimate of $0.85.
Revenue of $765 million compared to an estimate of $752.7 million.
The company generated subscription revenue of $750 million, up 11% year over year. Okta also has $271 million in free cash flow, up from $238 million in the prior year’s quarter.
While standard cybersecurity software protects human workers, the latest catalyst sparking Okta’s strong corporate performance is the rapid emergence of autonomous AI agents that can access sensitive corporate databases and interact with privileged executive accounts.
“AI agents are rapidly becoming a new workforce inside every organization, creating a wave of identities that must be secured and governed alongside human users,” said Todd McKinnon, CEO and cofounder of Okta. “We’re expanding our opportunity as the world’s leading independent and neutral identity provider and helping customers make identity the unified control plane for their secure agentic enterprise.”
Okta raised its fiscal 2027 revenue guidance to between $3.185 billion and $3.205 billion, roughly in line with estimates of $3.18 billion. The company formally dropped its long-term projected non-GAAP tax rate from 26% down to 21%. This adjustment is a direct byproduct of the federal corporate tax frameworks under the One Big Beautiful Bill Act.
Shares of Okta have risen around 9% since the beginning of this year.
HP Enterprise and Super Micro Computer shares are surging in premarket trading, getting a big boost from rival Dell’s strong Q1 results.
Dell’s $16.1 billion in AI-optimized server sales for the quarter alone proved that enterprise data center demand is accelerating faster than Wall Street had anticipated. The company posted revenue of $43.8 billion, exceeding Street estimates of $35.5 billion. Management now sees full-year sales of about $167 billion, well above the $142 billion expected by analysts.
The read-through is particularly relevant for Super Micro, one of the largest suppliers of Nvidia-powered AI server systems, and HPE, which has been expanding its AI infrastructure and liquid-cooling offerings through its partnership with Nvidia.
The moves suggest investors view AI infrastructure as a broad spending cycle that benefits server makers across the entire ecosystem.
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