Key Highlights

● Adobe jumped to $270.55 and Intuit rose to $354.90 as investors rotated into software.

● Cybersecurity names including CrowdStrike, Palo Alto Networks, Zscaler and Cloudflare rallied.

● The Philadelphia Semiconductor Index posted its biggest one-day drop since June 23.

● RingCentral jumped after hours on an earnings beat and a raised profit outlook.

Thursday's technology selloff was not a uniform rout. While chipmakers suffered their worst day in months, software and cybersecurity stocks moved the other way.

Salesforce (NYSE:CRM) climbed to trade around $250, and Adobe (NASDAQ:ADBE) jumped to $270.55. Software names including HubSpot (NYSE:HUBS), Monday.com (NASDAQ:MNDY) and Workday (NASDAQ:WDAY) gained, while cybersecurity stocks such as CrowdStrike (NASDAQ:CRWD), Okta (NASDAQ:OKTA), Palo Alto Networks (NASDAQ:PANW), Zscaler (NASDAQ:ZS), Check Point (NASDAQ:CHKP) and Cloudflare (NYSE:NET) rallied.

That happened even as the Nasdaq Composite tumbled 694 points to 26,008.86 on Thursday, October 22, its steepest drop since June 5, and the Philadelphia Semiconductor Index posted its biggest one-day drop since June 23.

A haven inside tech

The move in software was described as a rebound into a "haven." Adobe's gain was attributed to rotation into beaten-down software names, and the company was also named Official AI Fan Experience Partner of the BWT Alpine Formula 1 team.

Intuit (NASDAQ:INTU) rose to $354.90, part of what reports described as a software rebound.

Check Point Software traded at $151.98, among the cybersecurity names that moved higher on the day.

The case against hardware

The selling in chips came from worries about the cost of the AI build-out. Meta Platforms (NASDAQ:META) reported negative free cash flow and roughly $825 billion in spending commitments. Lam Research (NASDAQ:LRCX) cited supply chain constraints. Nvidia (NASDAQ:NVDA)'s Jensen Huang said "The demand of the capital is much greater than the availability of the capital."

Nvidia traded at $212.21 and was the single biggest drag on the S&P 500, according to market data. Lam Research, KLA (NASDAQ:KLAC), AMD (NASDAQ:AMD) and Marvell (NASDAQ:MRVL) all fell steeply.

IBM (NYSE:IBM) CEO Arvind Krishna offered a view that fit the software rally. He said customers are "a lot more cognizant and a lot more aware of what is the true ROI of all of their AI spend," and added, "That is the tailwind for us." IBM shares recovered from an early slide to finish roughly flat.

Not all software was spared

The rotation had limits. Microsoft (NASDAQ:MSFT) fell to $521.08, down $11.87, and Alphabet (NASDAQ:GOOGL)'s Class C shares slid $10.19 to $320.76, both caught in the AI selloff ahead of their results next week. The broad technology sector was still the worst performer in the S&P 500.

After the bell, communications software provider RingCentral (NYSE:RNG) jumped in after-hours trading on an earnings beat and a raised profit outlook, a sign that some software names are still being rewarded for results.

A broader rotation

The software bounce was part of a wider shift. About two of every three S&P 500 stocks rose, according to market data, and the equal-weight S&P 500 gained. Consumer staples had their best day since April 2025 and hit a record, health care also set a record, and homebuilders rallied as Treasury yields fell.

"People are running away from tech," one strategist said. Thursday suggested they were running toward at least part of it.

Microsoft Results Test the Software Bounce

Microsoft reports on October 28 and will offer a fresh read on software demand alongside its AI infrastructure spending. ServiceNow (NYSE:NOW) also reports that day. Investors will watch whether the software rebound holds if chip stocks stabilize, or whether Thursday's rotation proves a one-day move.