ServiceNow and Snowflake surge on enterprise AI rotation as chip equipment retreats, SOXX -5.6%

Enterprise software staged a decisive separation from chip-equipment stocks on Friday, with ServiceNow, Snowflake, Datadog, and MongoDB each surging between 7% and 10% on AI spending momentum, while Applied Materials and Lam Research gave back a portion of Thursday’s post-Micron gains, pulling the SOXX semiconductor ETF down 5.64%. The S&P 500 closed near flat at 7,354.02, off 0.05%, and the Nasdaq Composite slipped 0.24% to 25,297.62, masking a sharp intra-sector divide between software gainers and silicon losers.

Today’s biggest movers

ServiceNow surges 9.85% as enterprise AI platform demand accelerates

ServiceNow, Inc. (NYSE: NOW) gained 9.85% to close at $98.34, its best single-session performance in months, as investors rotated into cloud-native AI software platforms ahead of the Q2 earnings season. The stock opened at $90.44 and held its gains throughout the session on volume of 21.3 million shares. ServiceNow raised full-year 2026 subscription revenue guidance to $15.735-15.775 billion in its Q1 report, implying 20.5%-21.0% constant-currency growth, citing Agentic AI deployments across its Now Platform as a key driver of accelerating enterprise renewals. Wall Street maintains a “Strong Buy” consensus on the stock. Friday’s close recovers significant ground from a 33% year-to-date drawdown that had weighed on the name since January.

The move underscores a broader re-rating of enterprise AI workflow software. Peers Snowflake, Datadog, and MongoDB all surged alongside NOW, suggesting institutional reallocation from semiconductor positions into recurring-revenue software is now well under way. For context on the sector’s earlier June weakness, see our recap of the June 23 chip-led AI stock selloff.

Snowflake jumps 9.65%, extending its post-earnings recovery

Snowflake Inc. (NYSE: SNOW) advanced 9.65% to $248.96, continuing a recovery that began after CEO Sridhar Ramaswamy described the company’s first fiscal quarter of 2027 as “a clear inflection point” in Snowflake’s AI journey. Snowflake reported product revenue of $1.33 billion in the May 27 quarter, up 34% year-over-year. Scotiabank set a $320 price target on June 8; HSBC lifted its target to $289 following the strong results. The 51-analyst consensus tracked by S&P Global remains “Strong Buy,” with an average price target of $287.91. Friday’s close of $248.96 sits approximately 15% below the consensus target, leaving room for further re-rating. Volume reached 25.4 million shares, well above the 30-day average.

Datadog climbs 8.52% after Truist upgrade; AI observability demand builds

Datadog, Inc. (NASDAQ: DDOG) rose 8.52% to $239.77, extending its 2026 gain to 79.24%. Truist Securities upgraded DDOG to Buy on June 15 and set a $300 price target, citing urgency in enterprise AI adoption and customers still in early stages of agentic deployments that require heavy observability and monitoring infrastructure. Datadog crossed $1 billion in quarterly revenue for the first time in Q1 2026, reporting $1.006 billion - 4.7% ahead of consensus estimates of $961.3 million - with 32% year-on-year growth marking the fourth consecutive quarter of revenue acceleration. The stock briefly traded above its average analyst price target of $241.36 during intraday highs before settling at $239.77 at the close.

MongoDB gains 6.77%, reversing its mid-week slide on Atlas momentum

MongoDB, Inc. (NASDAQ: MDB) closed at $314.01, up 6.77%, recovering ground lost earlier this week when the stock fell amid AI software profit-taking concerns. The rebound follows a cluster of analyst upgrades after MDB’s Q1 fiscal 2027 report showing total revenue of $687.6 million, up 25% year-over-year, with Atlas cloud database revenue rising more than 29%. Bank of America analyst Koji Ikeda raised his price target to $450 from $390, maintaining Buy; Citigroup lifted its target to $455; Stifel raised to $435 from $330. CEO CJ Desai cited “real and growing momentum from AI and agentic workloads” as the primary demand catalyst. At $314.01, MDB trades approximately 21% below the average analyst target of $397.

Applied Materials drops 6.16% in post-Micron profit-taking

Applied Materials, Inc. (NASDAQ: AMAT) shed 6.16% to close at $626.84, one session after surging on the back of Micron’s blowout quarterly results. Multiple Wall Street banks raised AMAT price targets in June - Jefferies to $770 from $510, Bank of America to $720, and Wells Fargo to $715 - premised on the company’s advanced 3D chip packaging roadmap unveiled at a company event earlier this month. B. Riley Securities set a $790 target. Despite Friday’s pullback, AMAT remains up 133.14% year-to-date, reflecting the extraordinary capital-spending cycle tied to AI infrastructure. The session’s intraday range of $622.03-$660.19 confirms elevated volatility in the post-Micron environment.

Lam Research Corp. (NASDAQ: LRCX) fell 5.66% alongside AMAT, closing at $379.09. Citigroup maintained a $450 price target on LRCX; the stock remains up 104.85% year-to-date despite persistent export-restriction risks on China shipments, a recurring overhang for chip equipment names covered in our June 23 sector recap.

Notable but quieter

Microsoft Corp. (NASDAQ: MSFT) rebounded 5.71% to $372.97 after printing a 52-week low earlier in the session; the stock remains down 21.14% year-to-date as investors weigh AI capital expenditure intensity against revenue returns. Stifel analyst Brad Reback lowered his MSFT price target to $400, and Q4 fiscal 2026 earnings are due July 28. Salesforce, Inc. (NYSE: CRM) gained 5.45% to $158.37 on renewed AI consolidation interest following the company’s $3.6 billion acquisition of customer-service AI platform Fin, announced earlier this week. ARM Holdings plc (NASDAQ: ARM) shed 3.87% to $334.27, pulled lower with the broad chip tape despite a 191.35% year-to-date gain. Broadcom Inc. (NASDAQ: AVGO) fell 3.67% to $365.02, extending a softening stretch that has trimmed its 1-month return to -14.43%.

What to watch next week

Microsoft’s Q4 fiscal 2026 earnings call, scheduled for July 28, is the next marquee event for the sector; Azure revenue growth and updated AI capital expenditure guidance will drive reaction across hyperscaler and semiconductor names. Reports of a delay in OpenAI’s IPO timeline circulated Friday and could weigh on private-market AI valuations and on listed names with OpenAI exposure early next week. Quarter-end rebalancing flows may add intraday volatility through Monday’s close as fund managers square June 30 positions. Federal Reserve speakers are scheduled in the coming days ahead of the July 30 FOMC rate decision, and any change in tone on rates could ripple through rate-sensitive technology multiples.

Not investment advice.