TEAM, NET Stocks Rally Overnight After Earnings: Is ‘SaaSpocalypse’ Finally Fading?

• The iShares Expanded Tech-Software Sector ETF (IGV), a widely followed benchmark for software stocks, gained 4.4% in July and has climbed more than 5% so far this month.
• Cloudflare beat Q2 expectations and raised its annual revenue forecast.
• Atlassian CEO Mike Cannon-Brookes pledged to buy up to $250 million of the company’s shares.

Atlassian Corp. (TEAM) and Cloudflare (NET) shares soared after their latest quarterly results and upbeat outlooks, signaling that software companies delivering strong financial performance are finally winning back investor support after enduring a stock rout for much of the year.

TEAM surged more than 30% in overnight trading on Thursday, while NET gained over 16% after both companies topped Wall Street expectations for their latest quarterly results. 

Cloudflare raised its full-year revenue forecast, and Atlassian forecast 13% annual sales growth, alongside CEO Mike Cannon-Brookes pegging a potential buy of up to $250 million of the company’s shares.

Shares of The Trade Desk, which also reported results on Wednesday, plunged 24% overnight as its top and bottom lines, as well as its forecast, failed to meet analysts’ targets.

Investors Return To SaaS

Still, a divergence appears to be emerging. Software stocks began a modest ascent last month, and companies posting strong earnings this season are seeing their shares soar, a sign that investors are shrugging off fears that AI tools will erode demand for niche software.

One of the key drivers has been robust cloud growth. Amazon Web Services, Microsoft Azure and Google Cloud all posted stronger-than-expected growth, with Google Cloud accelerating to a record 82%. Enterprise cloud spending is widely viewed as a proxy for demand across the software market.

The iShares Expanded Tech-Software Sector ETF (IGV), which largely tracks software stocks, gained 4.4% in July and is already up over 5% so far this month.

Retail View On NET, TEAM

On Stocktwits, retail sentiment for NET and TEAM shifted to ‘extremely bullish’ from ‘bullish’ amid ‘high’ message volume. 

“Another reminder that this is still a market where execution matters,” a trader said. “Strong companies are being rewarded, while those falling short are getting punished. Look at the latest reactions from: $NET earnings, $TTD earnings. The market is making it clear: Outperformance gets capital. Underperformance gets ignored.”

NET, TEAM Results Recap

Atlassian, the maker of workplace software programs Trello, Jira, and Confluence, reported fourth-quarter earnings of $1.87 a share and revenue of $1.77 billion, up 28% from a year ago. Analysts had expected earnings of $1.50 a share and revenue of $1.66 billion.

For the full-year fiscal 2027 ending in June, Atlassian expects revenue growth of about 13% from a year earlier.

Cloudflare reported revenue of $696.1 million and EPS of $0.29, above analysts' estimate of $665.5 million revenue and $0.27 per share profit. The cybersecurity company raised its annual revenue forecast to a range of $2.86 billion to $2.87 billion, ​from $2.805 billion to $2.813 billion previously.

In May, Cloudflare had announced it would cut roughly ⁠20% of ​its workforce, more than ​1,100 jobs, as part of AI-led restructuring.

For updates and corrections, email newsroom[at]stocktwits[dot]com.