Varonis Systems, Nutanix, and Bandwidth Surge as AI Rally Reshapes Software Sector: What You Need to Know
A broad afternoon rally swept through technology stocks on Wednesday, extending a two-day AI-fueled surge that began with Snowflake's historic jump and gained steam after Dell's blowout quarterly report. The moves provided fresh evidence that enterprise AI adoption is accelerating across both software and hardware layers, pushing back against a prevailing bearish narrative that had weighed on the sector for months.
Snowflake shares soared 36% on May 28, marking the company's best single-day performance since its 2020 IPO. The results showed that AI is driving consumption of its data platform rather than displacing it. Then Dell's quarterly figures, released after the bell the same day, confirmed the physical infrastructure side is scaling faster than most analysts had modeled: $43.8 billion in total revenue, up 88% year-over-year; AI server revenue of $16.1 billion — a 757% jump; and a record $51.3 billion AI backlog.
The combined read-through was clear: enterprises are deploying AI at scale and need both the software and the hardware to run it. A supportive macro backdrop added to the enthusiasm. The 10-year Treasury yield slid to 4.45% following reports of a U.S.-Iran truce extension, lowering the discount rate on growth-oriented, long-duration stocks.
While the broader market reaction may seem outsized, price swings in individual names can create entry points for investors willing to look past short-term noise. Several stocks saw notable gains:
Varonis Systems (VRNS) shares climbed sharply, one of 21 moves greater than 5% the stock has made in the past year. In this context, today's advance signals that the market views the news as meaningful but not necessarily a fundamental shift in the company's outlook. The previous major move came just one day earlier, when Varonis gained 6.2% on Snowflake's results — evidence that the so-called "SaaSpocalypse" thesis was overstated for platforms embedded in AI workflows.
The SaaSpocalypse narrative had erased roughly $2 trillion in software market values since late 2025 on fears that autonomous AI agents would make per-seat subscription software obsolete. Snowflake's quarter turned that logic on its head: AI accounts on the platform jumped from 9,100 to 13,600 in a single quarter, product revenue grew 34%, and the full-year guidance was raised by $180 million. Competitors and adjacent names followed — ServiceNow added 5%, Palantir rose nearly 6%, Oracle and Microsoft each gained roughly 3%, and the iShares Expanded Tech-Software Sector ETF (IGV) rallied.
Snowflake CFO Brian Robins highlighted Cortex Code as creating a "step function change" in AI revenue potential, calling it the biggest driver of the guidance raise. Rather than replacing existing platforms, enterprises are using AI to generate more workloads that run on them.
Varonis shares have gained 6.6% year-to-date but at $34.16 remain 46% below their 52-week high of $63.31 from October 2025. An investor who bought $1,000 of Varonis stock five years ago would now have about $712.
WHILE YOU’RE HERE: The Next Palantir? One satellite company captures images of every point on Earth. Every single day. The Pentagon wants it. Hedge funds are using it to beat earnings. You’ve probably never heard of it. This is what the early days of Palantir looked like before it became a $437 billion giant. Same playbook. Different technology. If you missed Palantir, you need to see this. Claim The Stock Ticker for Free HERE.