Software and cybersecurity stocks advanced as Salesforce's earnings and AI partnership rekindled enthusiasm for the sector, with investors rotating into application-layer names in search of the next high‑consumption use case for token economics.

Tech Software Sector ETF $iShares Expanded Tech Software Sector ETF(IGV.US) led the move.

$Salesforce(CRM.US) revenue figures shut down short sellers: adj. EPS reached $5.9, far exceeding Wall Street estimates ($3.27), while revenue hit ~$11.3bn, also beating expectations. The company also announced an expansion of its AI partnership with Anthropic.

The stock surged significantly, pulling the broader software sector higher. 

Capital generally views this as a signal that the 'AI shock to software' narrative has faded, replaced by a key driver for accelerated revaluation of enterprise software.

$CrowdStrike(CRWD.US): The stronger the AI, the more cyberattacks occur (due to LLMs having rich data and context). With more agents, identity verification becomes essential,and enterprises need better security. Cybersecurity software is becoming increasingly critical.

-Chart: Software sector performance ranking on 08-27 trading day

Software ETF:$iShares Expanded Tech Software Sector ETF(IGV.US)

Data Management:$Palantir Tech(PLTR.US)$ServiceNow(NOW.US)$Snowflake(SNOW.US)$MongoDB(MDB.US)$Oracle(ORCL.US)

Enterprise Software:$Salesforce(CRM.US)$UiPath(PATH.US)$CloudFlare(NET.US)$IBM(IBM.US)$Microsoft(MSFT.US)$SAP AG-Sponsored(SAP.US)

Cybersecurity:$CrowdStrike(CRWD.US)$Palo Alto Networks(PANW.US)$First Trust Nasdaq Cybersecurity(CIBR.US)

Niche Verticals:$AppLovin(APP.US) (Advertising), $Figma(FIG.US)$Adobe(ADBE.US) (Design), $Tempus AI(TEM.US) (AI Healthcare)

Market Seeks 'Next Coding'

In H1, hardware stocks like storage and optical communications soared, while software and Bitcoin lagged. 

Institutions underweight software, and many investors gave up, only to chase hardware in June, only to be caught in the epic pullback in July. Meanwhile, AI monetization fundamentals are just starting this quarter.

Now, the same script is repeating: large hardware positions are trapped. 

But what's truly frustrating isn't that hardware isn't rising, but that software suddenly explodes while Bitcoin and gold surge across the board.

This year, the rise of AI coding led to a significant increase in paid penetration among C-end users, pushing token consumption to historic peaks. 

New demands in AI office productivity and large-scale CSP cloud deployments have intensified price wars between open-source and closed-source frontier models, further driving down token costs.

So, what is the second super-use case beyond Coding?

Data disclosed by A16Z shows the fastest-growing adoption areas for Codex among high-intensity AI users since February:

Legal 108x, Sales 41x, Recruiting 41x, Marketing 26x, Healthcare 24x

$Microsoft(MSFT.US) $Alphabet - C(GOOG.US) $Meta Platforms(META.US) $Amazon(AMZN.US) $Apple(AAPL.US) $Tesla(TSLA.US)