In early 2026, investors punished enterprise software broadly on fear that AI agents would let companies do more with fewer paid software seats, sending a widely tracked software index down more than 21% and, for the first time ever, below the S&P 500's valuation. That fear didn't materialize for eight companies that supply the internet's underlying infrastructure — content delivery, cloud databases, identity checks and system monitoring — which have gained an average 30% over the trailing year. The group's last holdout, ServiceNow, which sells workflow-automation software large enterprises use to manage IT tickets and other back-office processes, just reported subscription revenue up 24.5% and a bookings measure (contracted-but-not-yet-billed revenue) up more than 21%, both beating its own guidance, and raised its full-year outlook. The trend model tracking its stock moved from deeply bearish to mildly bearish within three trading days of that report — a sign the rally's final laggard is turning on new bookings, not just a bounce in a beaten-down stock.

Broad participation, not two names carrying it. Six of the eight members — Datadog (+92.6% over the year), MongoDB (+49.0%), Akamai (+52.6%), Okta (+45.3%), Snowflake (+40.7%) and Cloudflare (+33.6%) — are all up double digits over the trailing twelve months; only ServiceNow (-39.7%) and Toast (-34.5%) are negative for the year. But those two laggards are now the fastest-moving names over the past 90 days (ServiceNow +20.9%, Toast +13.1%), meaning the group's weakest members are inflecting hardest, not lagging behind a two-name rally. As of July 31, trend patterns confirm the breadth: Cloudflare, Datadog, Okta and Snowflake trade above both their short- and long-term moving averages in a strong uptrend; Akamai, MongoDB and Toast sit in milder uptrends; only ServiceNow remains in a downtrend, though a less severe one than a week earlier.

Does the business support the move? Mostly, yes. Datadog, whose software watches over the health of clients' cloud servers and applications, posted its first-ever $1 billion revenue quarter, growth of 32%, and raised full-year guidance by $240 million after a single quarter, adding customers paying more than $100,000 a year at a 21% clip. Snowflake, which rents out cloud storage and analytics tools that let companies query massive datasets, raised its full fiscal-year revenue-growth guidance from 27% to 31%, helped by an AI coding tool, Cortex Code, that gained more customers than management had modeled. Okta, which verifies employee and customer logins for other companies' software, saw a retention metric inflect for the first time in years, from 106% to 107% of prior-year revenue retained, in a quarter management linked partly to new AI-agent-identity demand. CONFIRMS: the earnings evidence supports the price move for these three, and for ServiceNow above.

The picture is more mixed for the rest. Cloudflare, which runs a global network delivering websites, blocking cyberattacks and offering a computing platform called Workers, grew revenue 28% to $738 million last quarter and guided to more than $5 billion in revenue before 2028, but the stock also fell 24% on its own earnings day in May after the company cut roughly a fifth of its staff to reshape its cost structure around AI — a genuinely two-sided quarter. MongoDB, whose Atlas cloud database is used by developers building AI applications, grew Atlas revenue 29% and saw vector-search adoption nearly double, even as total-company revenue growth is guided to slow to 16%-18% next fiscal year — a real divergence between an exciting AI-adjacent metric and slowing total growth (INCONCLUSIVE). Akamai, the original content-delivery-network operator now pivoting toward security and cloud computing, signed a $1.8 billion, seven-year cloud contract with AI company Anthropic — its largest customer deal in 28 years — but that new business is still under 9% of revenue while its legacy delivery business keeps shrinking about 7% a year. Toast, which sells point-of-sale and payment software to restaurants, added 7,000 net new locations last quarter and raised full-year profit guidance, even as it was one of the year's two decliners.

Does the valuation justify it? Increasingly, no, for the biggest gainers. Datadog's trailing price-to-sales ratio nearly doubled in three months, from 13.6x to 24.3x; Okta's rose from 4.6x to 8.0x while its revenue grows only 9%-11% a year; Snowflake's climbed from 10.5x to 18.6x. That is CONTRADICTS territory — the re-rating from depressed multiples that started this move has largely already happened for these three. ServiceNow's price-to-sales ratio, by contrast, rose a milder 16% (6.7x to 7.8x) even after its earnings beat, and Toast's trailing price-to-earnings ratio actually fell, from 51.8x to 46.2x, because its profit grew faster than its stock — both still look like unwound de-rates with more room, a genuine CONFIRMS for the hypothesis's question about what's left from current prices.

The setup

Where it stands — Six of eight members show earnings-confirmed growth and bullish trend patterns; three of the biggest gainers already re-rated to stretched multiples. Would confirm — ServiceNow's next-quarter bookings growth holds above 20% and Okta's retention metric climbs past 107%. Would invalidate — Datadog, Snowflake or Okta's price-to-sales ratio retraces most of its 90-day gain without a matching growth slowdown to explain it. Watch next — ServiceNow, Datadog, Snowflake and Okta report fiscal third-quarter results between late September and December 2026. Valuation — Datadog trades at 24.3x trailing sales, up from 13.6x three months ago; ServiceNow at 7.8x, up a milder 16% over the same span.