What Happened?
A number of stocks jumped in the afternoon session after investor confidence rebounded as markets softened their view on the existential threat AI poses to traditional software companies.
After a period of significant underperformance, dubbed the "SaaS Rout of 2026," where software stocks traded at a discount to the S&P 500, the prevailing fear that AI would completely disrupt and replace traditional Software-as-a-Service (SaaS) companies began to subside.
Experts noted that these companies possess significant advantages, including established enterprise relationships, vast amounts of proprietary data, and deep integration into customer workflows, which AI is unlikely to erase overnight. This changing perspective suggests a potential re-rating for the sector as investors realize these companies may be well-positioned to integrate and leverage AI rather than be replaced by it.
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:
- Document Management company Box (NYSE: BOX) jumped 2.6%. Is now the time to buy Box? Access our full analysis report here, it’s free.
- Vertical Software company Bentley Systems (NASDAQ: BSY) jumped 2.8%. Is now the time to buy Bentley Systems? Access our full analysis report here, it’s free.
Zooming In On Bentley Systems (BSY)
Bentley Systems’s shares are not very volatile and have only had 8 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 11 days ago when the stock gained 6.5% on the news that the company reported first-quarter 2026 results that surpassed analyst expectations for both revenue and earnings.
The infrastructure engineering software company announced revenue of $424.2 million, a 14.5% year-over-year increase that narrowly beat the consensus estimate. Adjusted earnings per share came in at $0.38, also topping predictions. Investors appeared to focus on these beats and other positive metrics, such as a strong 109% net revenue retention rate and an impressive gross profit margin of 95.1%. The positive reaction came despite some weaker points in the report, including a miss on billings and a year-over-year decline in operating margin.
Bentley Systems is down 13.3% since the beginning of the year, and at $33.09 per share, it is trading 43.6% below its 52-week high of $58.72 from July 2025. Investors who bought $1,000 worth of Bentley Systems’s shares 5 years ago would now be looking at only $640.57.
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