AI software stocks rally 5% as Figma, Shopify lead sector rebound

AI application software stocks opened sharply higher Tuesday, with Figma jumping more than 5% and Shopify and Cloudflare each gaining over 4%, as investors rotated into software names amid a broader selloff in semiconductor stocks.

The rally pushed ServiceNow up more than 3% and Salesforce nearly 3%, making the group the strongest performers in the tech sector. The moves came as the tech-heavy Nasdaq Composite slid 0.9%, dragged lower by memory-chip stocks after Samsung Electronics posted strong earnings that nonetheless failed to meet elevated market expectations.

"The rotation out of semiconductors into application software is a bet that AI monetization is shifting from infrastructure buildout to end-user adoption," said Alex Nguyen, an analyst covering enterprise software at Edgen. "Software companies with clear AI integration stories are where investors are parking capital today."

Figma, the design collaboration platform that went public last year, has been a beneficiary of the AI design automation trend. The company recently launched Figma AI, a suite of generative design tools that allows users to auto-generate UI components and layouts. Shopify has integrated AI-powered merchant tools including automated product descriptions and customer service chatbots, while Cloudflare's AI inference platform Workers AI has driven a 40% increase in developer sign-ups, according to the company's most recent quarterly filing.

ServiceNow's AI workflow automation platform, Now Assist, has been a key growth driver, contributing to the company's 22% year-over-year subscription revenue growth in its most recent quarter. Salesforce's Agentforce, its AI-powered autonomous agent platform, has been cited by management as the company's fastest-growing product in a decade.

The rally in AI software stocks stands in contrast to the pressure on semiconductor names. The PHLX Semiconductor Index fell 4.3% Tuesday, with memory-chip makers bearing the brunt of the selling after Samsung's earnings sparked concerns that second-quarter expectations had become too optimistic. Nvidia, the dominant AI chipmaker, bucked the trend with a 1% gain, but most chip stocks declined.

The divergence between software and hardware reflects a broader debate about where AI value accrual will concentrate. While chipmakers have captured the bulk of AI-related revenue over the past two years — Nvidia's data center revenue alone reached $62 billion in its most recent fiscal year — software companies are beginning to demonstrate that they can monetize AI at the application layer.

For investors, the question is whether the software rally has room to run. Salesforce trades at 28 times forward earnings, a premium to the S&P 500's 22 times but below its five-year average of 35 times. ServiceNow trades at 52 times forward earnings, reflecting its higher growth rate. Figma, still unprofitable on a GAAP basis, trades at 12 times forward revenue.

"The software group has underperformed semiconductors year to date, so there's catch-up potential if AI adoption accelerates through the second half of 2026," Nguyen said. "But the bar is rising — these companies need to show actual revenue acceleration from AI products, not just user sign-ups."

This article is for informational purposes only and does not constitute investment advice.