Stock market investors continue to pile into AI chip names. On AJ Bell, for example, Nvidia, Broadcom, and Micron have seen heavy buying.

There’s another area of the market that’s providing much higher returns right now though. This sector was smashed earlier in the year but is now making a historic comeback.

The sector I’m talking about is software. Back in early 2026, this area of the market was absolutely hammered. At the time, investors were panicking that AI was going to kill software businesses. The sell-off was so brutal that it was coined the ‘SaaSpocalypse’.

Recently however, software stocks have come roaring back. That’s because earnings have shown that AI’s actually boosting growth for a lot of these companies.

Some of my software stocks are up more than 40% in the space of a few months. The gains have been truly astonishing.

One example here is Snowflake (NYSE: SNOW), which I’ve highlighted on several occasions this year. It just produced blowout earnings in which product revenue was up 37% year on year. This led to a 20%+ jump in its share price. Since its SaaSpocalypse lows in April, it’s surged 200%.

Another is Salesforce (NYSE:CRM). It just beat earnings expectations and raised its guidance for the year, thanks to strong demand for its agentic AI solutions. Its share price also just had a 20% pop. Since late June, it’s surged 80%.

Now, I don’t think it’s too late to consider buying here. Because earnings growth could remain strong for a while given the rapid adoption of AI.

As analysts are aggressively raising their price targets, this activity could lead to further gains. In the case of Snowflake, Wells Fargo just stuck a $525 price target on the stock. That’s almost 50% higher than the current share price.

Other firms that see huge potential include UBS, Citi, and Oppenheimer. Their price targets are $500, $490, $475 respectively.

Turning to Salesforce – which just rolled out a new Claude-based service – numerous brokers have just stuck $300 price targets on the stock. That’s about 15% higher than the current share price. Clearly, sentiment towards this name has improved dramatically. Earlier in the year, many investors believed this company would be decimated by AI.

Of the two stocks, Salesforce is far cheaper. It’s currently trading on a forward-looking price-to-earnings (P/E) ratio of just 16, which is low for an established software company. At that earnings multiple, I see scope for an upward valuation re-rating. That said, there still are some AI disruption risks here.