A number of stocks jumped in the afternoon session after shares of enterprise software and SaaS companies rallied broadly as investors rotated capital out of semiconductor and AI-hardware stocks following calls for an artificial intelligence development slowdown.
According to Reuters, while chipmakers and hardware providers faced steep sell-offs after leaders from Anthropic and OpenAI urged a pause in frontier AI advancement, software stocks bucked the broader tech trend and climbed higher in early trading. Market participants viewed the potential deceleration in AI infrastructure spending as a catalyst to rotate back into traditional enterprise software names like ServiceNow, Salesforce, and Adobe.
Investors have increasingly feared that unchecked AI progress could yield autonomous agents capable of bypassing traditional software interfaces entirely. A development freeze limits that threat. It also gives incumbent platforms breathing room to package AI as a feature within their own ecosystems, preserving their recurring revenue without the immediate risk of frontier models rendering their core software obsolete.
Broadly, these SaaS companies are perceived as less vulnerable to a sudden halt in hyperscaler capital expenditures; instead, they offer steady recurring revenue streams and are positioned to benefit from a more deliberate, measured integration of existing AI tools into corporate workflows rather than a frantic, capital-intensive race for raw compute power.
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 9.2%.Is now the time to buy HubSpot? Access our full analysis report here, it's free.
Automation Software company ServiceNow(NYSE:NOW) jumped 6.5%.Is now the time to buy ServiceNow? Access our full analysis report here, it's free.
Identity Management company Okta(NASDAQ:OKTA) jumped 10.9%.Is now the time to buy Okta? Access our full analysis report here, it's free.
Finance and Accounting Software company Workday(NASDAQ:WDAY) jumped 4.9%.Is now the time to buy Workday? Access our full analysis report here, it's free.
Network Security company Zscaler(NASDAQ:ZS) jumped 14.9%.Is now the time to buy Zscaler? Access our full analysis report here, it's free.
Zscaler's shares are extremely volatile and have had 31 moves greater than 5% over the last year. But moves this big are rare even for Zscaler and indicate this news significantly impacted the market's perception of the business.
Zscaler is down 14.3% since the beginning of the year, and at $188.94 per share, it is trading 43.8% below its 52-week high of $336.27 from November 2025. Investors who bought $1,000 worth of Zscaler's shares 5 years ago would now be looking at only $685.10.
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