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FinanceAI Rotation Fuels Surge in Salesforce, ServiceNow, Workday; Chip Stocks Slide
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Enterprise software stocks staged a sharp rebound on July 27, 2026, with Salesforce up 7%, ServiceNow up 8%, and Workday up 10% in midday trading. The rally was driven by a rotation out of AI-chip stocks like NVIDIA (down 5%) and AMD (down 7%) into oversold software names. The move was supported by strong AI monetization results: Salesforce's Agentforce ARR surged 205% to $1.2 billion, ServiceNow's AI business crossed $1 billion in annual contract value, and Workday reported over 4,000 customers using agentic AI products. All three companies beat earnings estimates. Lower oil prices and easing rate concerns also favored higher-multiple software stocks. Analysts caution the bounce could reverse quickly if chip sentiment recovers.
Source report
Author: David Moadel Source: 24/7 Wall St.
Quick Read
- Salesforce (CRM) and ServiceNow (NOW) shares gained 7% to 8%, recovering from steep prior declines, supported by strong AI results. Agentforce ARR rose 205%, and ServiceNow AI surpassed $1 billion.
- NVIDIA (NVDA) and AMD (AMD) dropped between 5% and 7% following a report that NVIDIA is guaranteeing OpenAI data-center financing, prompting capital to rotate into oversold software names.
- The bounce could reverse quickly if chip sentiment recovers; staggered entries and modest position sizing are advisable given the speed at which recent rotations have unwound.
Market Overview
Enterprise software stocks staged a coordinated rebound in Monday midday trading:
| Stock | Ticker | Price | Gain | |-------|--------|-------|------| | Salesforce | NYSE:CRM | $176 | +7% | | ServiceNow | NYSE:NOW | $107 | +8% | | Workday | NASDAQ:WDAY | ~$149 | +10% | | Adobe | NASDAQ:ADBE | $241 | +7% | | Palantir Technologies | NYSE:PLTR | $131 | +7% |
The moves mark one of the sharpest single-day reversals for the group this year.
Context: Deeply Oversold Names
Each of these stocks had experienced significant declines prior to Monday's rebound:
- Salesforce: Down 33% year to date (YTD)
- ServiceNow: Down 45% over the past year
- Workday: Down 30% YTD
Rotation from Chips into Software
The bounce reflects broad sector rotation away from AI-chip names and into enterprise software.
NVIDIA (NASDAQ:NVDA) shares fell 5%, and Advanced Micro Devices (NASDAQ:AMD) shares dropped 7%, following a report that NVIDIA is guaranteeing OpenAI data-center financing.
Broader Market Conditions
- WTI crude oil fell 7% over the past 24 hours to $82.83, following a reported U.S.-Iran pause, easing rate and inflation concerns.
- Lower yields favor higher-multiple software names.
- Capital exiting crowded AI-infrastructure trades appears to be recycling into application-layer software that has already reset.
Earnings Provide Fundamental Support
ServiceNow (Q2 FY2026)
- Non-GAAP EPS: $0.90 vs. $0.86 consensus
- Revenue: $3.99 billion, up 24% year over year (YoY)
- ServiceNow AI: Crossed $1 billion in annual contract value
- Agentic deployments: Up ninefold in nine months
CEO Bill McDermott stated that ServiceNow is "the fastest-growing major enterprise software and cybersecurity company" and is operating to the Rule of 56.
Salesforce (Q1 FY2027)
- Revenue: $11.13 billion, up 13.3% YoY
- Agentforce ARR: $1.2 billion, up 205% YoY
- Combined Agentforce and Data 360 ARR: Approaching $3.4 billion
- FY2027 revenue guidance raised: $45.9 billion to $46.2 billion
- Share repurchase: Announced a $25 billion accelerated share repurchase program
Workday (Q1 FY2027)
- Non-GAAP EPS: $2.66 vs. $2.52 consensus
- Subscription revenue growth: 14.3% YoY
- Agentic AI adoption: More than 4,000 customers now use at least one agentic AI product
Returning CEO Aneel Bhusri asserted, "Workday is ready for this AI moment."
Analyst Note
The analyst who called NVIDIA in 2010 has named his top 10 AI stocks — Salesforce did not make the cut.
Source
Yahoo FinanceWestern
Part of this Story
Salesforce, ServiceNow, Workday Surge as Software Rebounds on AI Rotation