TradingKey – Salesforce (CRM) dispelled the long-standing pessimism hanging over the software sector with a better-than-expected earnings report.

On the first trading day following the earnings report, Salesforce shares surged 22.6%, recording their best single-day performance in nearly six years and significantly narrowing their year-to-date decline. The rally also spread across the software sector, with ServiceNow (NOW), Adobe (ADBE), and Fortinet (FTNT), among several other software stocks, advancing in tandem.

The market is once again betting that while generative AI may change the way traditional software operates, it will not necessarily replace SaaS companies entirely.

Guggenheim analyst John DiFucci believes that this earnings…