The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

By Pranav Kiran

TORONTO, June 8 (Reuters Breakingviews) - After the SaaSpocalypse comes the renAIssance. The rise of autonomous programming tools like Claude Code pummeled cloud software peddlers suddenly at risk of obsolescence. Firms like $150 billion Salesforce CRM.N sought to remodel themselves as unlikely winners, unveiling a raft of finicky metrics to prove their AI bona fides. There are early signs that they just might have a point, but they’re digging out of a deep hole.

The release of science-fiction-seeming features for chatbot Claude in February wiped over $800 billion in market value off software and services stocks. The question was whether customers would suddenly start using chatbots to write their own replacements for Salesforce’s or ServiceNow’s NOW.N software, or whether they would instead employ AI-powered “agents” to use these products for them.

SaaS companies eagerly built model-context protocols, essentially a way for agents to access data and perform tasks across software applications. Salesforce's Marc Benioff touts that the company has processed 4.5 million such MCP calls on its Headless 360 platform since it launched in April.

This is part of a flood of new supposed proof points, like Salesforce’s "Agentic Work Unit", which counts tasks performed by agents with its products. Photoshop maker Adobe ADBE.O reports “AI-influenced” and “AI-first” revenue.

To be clear, AI will not lift all software boats. Bain estimates that there’s a $100 billion in the United States from automating labor. For some tasks, third-party tools will either be more convenient for agents to use or essential for structuring usable data. Software that simply coordinates human activity, like task tracker Monday.com 6B6.F or marketing list organization on HubSpot HUBS.N, will be more at threat. Those companies’ shares have slumped 72% and 64%, respectively, over the last year.

Conversely, potential winners are gaining some momentum. Benioff-led Salesforce said that annual recurring revenue at its AI-focused Agentforce segment jumped 205% year-over-year to $1.2 billion in the first quarter. TD Cowen analysts expected only about $900 million. The company's shares have since risen about 4%.

Combined with Snowflake's nearly 40% surge after reporting earnings, investor sentiment is thawing. On June 1, retail investors invested a net $46 million into the iShares Expanded Tech-Software ETF, a daily record, according to Vanda Research. The ETF rose 21% in May, its best monthly return in five years, according to LSEG data.

Right now, it’s just making up lost ground. Members of the Software Equity Group SaaS Index trade at an average enterprise value of under 4 times their trailing twelve-month revenue, down from about 6 times just a year ago. Whatever optimism exists is still extremely cautious.

CONTEXT NEWS

Retail investors bought stock worth a net $46 million in the iShares Expanded Tech-Software Sector ETF on June 1, surpassing the previous single-day record by roughly 40%, according to Vanda Research data.

The ETF's previous record buying day was in early February, when retail traders purchased a net $32.8 million.