SaaS and cybersecurity stocks rebound

What happened: SaaS and cybersecurity stocks rebounded in April 2026, ending weeks of sell-offs driven by fears of an "AI apocalypse." Key events included strong earnings from Snowflake and Okta, a 6% surge in software stocks led by cybersecurity firms like CrowdStrike and Palo Alto Networks, and SentinelOne's solid revenue growth despite a stock tumble. Goldman Sachs and other analysts now view the AI-driven sell-off as overdone, recommending software stocks like Figma and Atlassian.

Market impact: The rebound lifted software and cybersecurity sectors, with the iShares Expanded Tech-Software Sector ETF gaining about 6% in a single day. This rally reversed a significant portion of the nearly 40% decline from 2022 highs. The turnaround was broad-based, affecting companies like SentinelOne, Tenable Holdings, and H1, which secured a $40M investment despite the challenging investment climate for pre-AI era startups.

What to watch next: Investors should closely monitor the following catalysts: 1) earnings reports from major SaaS and cybersecurity companies in the coming weeks, including Okta's Q2 results on May 25, to gauge the sustainability of the rebound; 2) further developments in AI technology and its integration into enterprise software, which could reignite concerns about competition; and 3) the broader market's performance, as any significant downturn could pull software stocks down with it.