Snowflake's strong earnings spark broad software stock rally as AI boosts platform adoption rather than replacing it

Snowflake surged 35% after reporting AI accounts on its platform jumped from 9,100 to 13,600 in a single quarter, product revenue grew 34%, and full-year guidance was raised by $180 million. Guidewire Software jumped 6.7% and Varonis Systems jumped 6.2% in the same session.

The results contradicted fears that autonomous AI agents would replace per-seat software licenses and hollow out SaaS business models. Instead, Snowflake's data shows enterprises are using AI to generate more workloads that run on the same platforms, with CFO Brian Robins describing Cortex Code as creating a 'step function change' in AI revenue potential.

The rally reflected a shift in market sentiment from the 'SaaSpocalypse'—a rolling selloff that had erased approximately $2 trillion from software market values since late 2025—toward recognition that AI-centered platforms remain valuable to traditional SaaS companies.