What Happened?
A number of stocks jumped in the afternoon session after investors appeared to rotate into oversold enterprise software names amid profit taking in chip stocks.
While the Nasdaq retreated and semiconductor leaders like Micron (-4%) sold off, major SaaS incumbents caught a strong bid.
ServiceNow (NYSE: NOW) surged 4.3%, and Salesforce (NYSE: CRM) climbed 2.4%. The divergence occurred against a backdrop of rising oil prices and geopolitical tensions in the Middle East that weighed on the broader indices. It seems the AI trade is rotating from the infrastructure layer to the application layer. After months of paying premium multiples for the chips required to build artificial intelligence, investors appeared to be shifting capital into the software companies that are actually monetizing it.
Earlier in 2026, software stocks suffered a severe valuation compression, dubbed the "SaaSpocalypse", driven by fears that AI agents would destroy traditional per-seat software licensing models. Recent data points, including ServiceNow raising its Now Assist AI contract target to $1.5 billion and Salesforce scaling its Agentforce platform, revealed that incumbents can sell AI as a premium add-on rather than watching it cannibalize their core business. Because enterprise SaaS providers own the proprietary data and daily workflows, they are positioned as the control layer for AI deployment.
With semiconductor valuations stretched to historic premiums, capital continued to hunt for the margin of safety found in quality software stocks with depressed forward multiples. However, risks remain: if macroeconomic pressures force enterprise CIOs to consolidate vendors further, second-tier software names without clear AI monetization could still struggle.
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:
- Sales Software company HubSpot (NYSE: HUBS) jumped 5.1%. Is now the time to buy HubSpot? Access our full analysis report here, it’s free.
- Sales Software company ZoomInfo (NASDAQ: GTM) jumped 6.5%. Is now the time to buy ZoomInfo? Access our full analysis report here, it’s free.
- HR Software company Paycom (NYSE: PAYC) jumped 5.1%. Is now the time to buy Paycom? Access our full analysis report here, it’s free.
Zooming In On ZoomInfo (GTM)
ZoomInfo’s shares are extremely volatile and have had 33 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 19 days ago when the stock gained 2.9% on the news that the 10-year Treasury yield dropped below 4.5%, providing valuation relief amid a broader tech pullback.
While semiconductor stocks like Micron (-2%) and Cerebras (-10%) dragged the Nasdaq lower, software names like Salesforce and ServiceNow found relative support from falling yields. The 10-year Treasury yield fell below 4.5% as oil prices slid, signaling easing inflation pressures. Software companies, particularly high-growth SaaS names, are highly sensitive to interest rates because their valuations are based on cash flows expected far in the future.
When the 10-year yield drops, the discount rate applied to those future earnings decreases, mechanically boosting their present value. While the broader tech sector is undergoing a "recalibration of expectations" following the semiconductor run-up, falling yields validate the structural valuation floor for software stocks with recurring revenue models.
ZoomInfo is down 67.7% since the beginning of the year, and at $3.10 per share, it is trading 74.6% below its 52-week high of $12.20 from September 2025. Investors who bought $1,000 worth of ZoomInfo’s shares 5 years ago would now be looking at only $58.57.
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