Key points
- Software is on pace for its biggest day of 2026. IGV, the main software ETF, was up about 7% by early Thursday afternoon, after going into the session down on the year while the S&P 500 was up double digits.
- The Salesforce (CRM) number everyone is quoting, $5.90 against a consensus of $3.09 to $3.27, contains a $2.6 billion gain on its investment portfolio that the company doesn't strip out of adjusted earnings. Back it out and I get about $3.37.
- Six software names reported Wednesday night and all six beat, but CrowdStrike (CRWD) showed the clearest acceleration. Palo Alto Networks (PANW) rose more than 13% and Zscaler (ZS) close to 10% without reporting anything at all.
Software's on pace for its best day of the year, and the number in every headline about it doesn't mean what it looks like it means. Salesforce (CRM) posted adjusted earnings of $5.90 a share Wednesday night against a Street consensus somewhere between $3.09 and $3.27, depending on whose numbers you use. Call it a beat of 80% or 90%, the kind of figure that normally signals a business inflecting. Most of it is a $2.6 billion gain on Salesforce's investment portfolio, which the company leaves sitting inside its adjusted earnings instead of stripping out. Back it out and the beat is single digits at best. The stock's up about 22% anyway.
The gain isn't the whole reason software's up today. Six clean reports and a badly positioned market did their part. But it's the number doing most of the persuading.
Wednesday's software results
Wednesday night was a clean sweep. Six software companies reported and all six came in ahead, which almost never happens in a single session.
| Company | Adjusted EPS vs estimate | The number that matters | Thursday, 2pm ET |
|---|---|---|---|
| Salesforce (CRM) | $5.90 vs $3.09 | cRPO up 14%, best bookings in four years | up 21.8% |
| Okta (OKTA) | $1.05 vs $0.86 | Full-year revenue guided to 10% to 11% growth | up 27.7% |
| CrowdStrike (CRWD) | $0.31 vs $0.24 | Record net new ARR, growth accelerating to 51% | up 18.8% |
| Veeva (VEEV) | $2.35 vs $2.10 | EPS 12% ahead of consensus | up 16.5% |
| Synopsys (SNPS) | $3.91 vs $3.47 | EPS 13% ahead of consensus | up 11.1% |
| Nutanix (NTNX) | $0.60 vs $0.43 | EPS 40% ahead, its fiscal fourth quarter | up 8.6% |
Estimates above come from our market data feed, and published consensus differs by provider. Several outlets put Salesforce nearer $3.27 and CrowdStrike nearer $0.29, which shrinks both beats without changing the direction.
CrowdStrike is the one I'd actually spend time on. Net new annual recurring revenue hit a record $332.8 million and growth in it accelerated to 51%, and the company raised its full-year net new ARR growth outlook by 630 basis points. Net new ARR is the cleanest read on whether a subscription business is speeding up, and growth like that isn't something you manufacture with accounting. CEO George Kurtz called it "the best quarter in CrowdStrike's history," and for once the superlative is defensible.
Okta is the opposite case. The quarter beat by $0.19 and the stock's up almost 28%. But the company guided full-year revenue to 10% to 11% growth and full-year earnings to $3.90 to $3.94 against $3.84 expected. A move that size is a long way ahead of what the guidance actually changed.
The Salesforce number everyone is quoting
Revenue grew 11%, and that includes Informatica, the data-management business Salesforce didn't own a year ago. Strip the acquisition out and organic growth was closer to 6%. Income from operations came in at $2.331 billion against $2.332 billion last year, flat to the million while revenue grew.
So where did the jump in per-share earnings come from? Two places, and neither one is operations. Salesforce booked $2.613 billion of gains on strategic investments, against almost nothing a year ago. Its reconciliation from GAAP to adjusted earnings adds back amortization of purchased intangibles, stock compensation, restructuring costs and a tax adjustment. No line removes the investment gain, so it sits inside the $5.90.
Spread across 821 million diluted shares, that gain works out to about $3.18 a share before tax. Salesforce applies a 20.5% rate to its adjusted figures, leaving about $2.53 after tax, and taking that off the $5.90 puts the underlying number near $3.37. Against the $3.27 consensus that's about in line, and against $3.09 it's a modest beat. Neither is 91%. The reconciliation is in the 8-K Salesforce filed Wednesday, which doesn't name the holding, though press reports tie the gain to the company's stake in AI firm Anthropic.
The rest is the share count. Salesforce borrowed heavily to fund a $25 billion accelerated buyback, and diluted shares fell from 962 million to 821 million. That's why adjusted profit rose far less than per-share earnings did. Take the gain back out and adjusted profit was essentially flat against a year ago.
There's a real argument on the other side, and it isn't the EPS line. Current remaining performance obligation, the contracted revenue due over the next twelve months, grew 14% in constant currency. Salesforce called that its strongest bookings quarter in four years. Bookings lead and revenue lags, so that's a genuine case the business turns up from here. If you own CRM, it's your case, and it's reasonable. It just isn't the case the $5.90 headline is making.
Tuesday's beats got sold. Wednesday's got bought.
Software companies reported Tuesday night too, and they also beat. Zoom (ZM) beat and fell 7% on Wednesday. Box (BOX) beat and barely moved. Intuit (INTU) beat on the quarter, then guided next year's earnings far below what analysts wanted and put TurboTax unit growth in the low single digits. It fell as much as 10% during Wednesday's session before closing down 3.2%, and it's flat today. Wednesday morning the story was that AI was coming for software, and Intuit was the proof.
Thirty hours later the story is that AI is saving software. Nothing about these businesses changed in between. Six companies reported at once, none of them fell apart, and the market was positioned for at least one of them to.
The tell is in the stocks that didn't report anything at all. Palo Alto Networks (PANW) is up more than 13% and Zscaler (ZS) close to 10%, and neither reports until next week. ServiceNow (NOW), Datadog (DDOG) and MongoDB (MDB) all rose on no news of their own. And nCino (NCNO), which missed badly Tuesday night, is up today too. When a company that just missed rallies with the group, you're not watching analysis. You're watching people who were short or underweight buy back exposure in a hurry.
The setup explains the violence. Software's been the most avoided corner of large-cap tech all year on the thesis that AI compresses seat-based pricing, and IGV went into Wednesday's close down on the year. A crowded underweight plus six reports that were merely fine is all the fuel a day like this needs.
What I'm watching from here
Tonight's reports, first. Workday (WDAY), Autodesk (ADSK), Elastic (ESTC), SentinelOne (S) and Rubrik (RBRK) all print after the close, and every one of them is already up on nothing but sympathy. Then Palo Alto on September 1 and Zscaler on September 3, both pre-rallied into prints they still have to deliver.
We've seen how this resolves. Datadog beat in early August and the stock dropped anyway, because the bar had already moved. A sector that reprices this hard has moved its own bar, and everyone reporting into it next week has to clear it. Whether AI spending holds up long enough to matter still runs through the gap between committed data-center dollars and actual demand, and today didn't settle it.
Prices in this piece are intraday as of about 2pm ET Thursday, August 27, and aren't settled closes.
