AI isn't killing software after all 💾

Welcome back to the Day Trading newsletter 📈

Nvidia delivered the biggest quarter in its history, beaten-down software stocks staged a furious comeback — and then new Fed Chair Kevin Warsh crashed the party Friday by putting a September rate hike on the table at Jackson Hole.

The S&P 500 still eked out a 0.5% weekly gain.

Let’s get into it 👇️ 

📆 Tuesday 9/1 — Dell earnings (before open): First read on AI server demand after Nvidia's blowout. Watch whether AI backlog growth justifies the sector's rebound.

📆 Tuesday 9/1 — ISM Manufacturing PMI (10am ET): Factory activity check as tariffs and grain inflation bite. A hot prices-paid component would feed the rate-hike case.

📆 Wednesday 9/2 — Broadcom earnings (after close): The other AI chip bellwether. Custom AI accelerator guidance will be measured against Nvidia's 70% growth forecast.

📆 Thursday 9/3 — Tesla Cybercab launch event (Austin): Invite-only reveal of Tesla's steering-wheel-free robotaxi. A credible production timeline could move the stock either way.

📆 Friday 9/4 — August jobs report (8:30am ET): Consensus sees about 58K jobs added with unemployment at 4.1%. With September hike odds near 60%, this is the last major data point that could tip the Fed's hand.

🎤 New Fed Chair Kevin Warsh used his first Jackson Hole speech to warn that the inflation fight isn't over — and markets now price a September rate hike as more likely than not. Odds of a hike jumped to about 60% after the speech, from 35% before, per CME data. Stocks slipped, yields and the dollar rose.

📉 PayPal cratered 15% Friday after Stripe and Advent International walked away from a buyout valued at more than $50 billion. The stock had run up more than 40% this quarter, largely on takeover speculation — and one of the two pillars holding it up just vanished.

🔼 Okta soared 28.6% Thursday to close at $172.91 — a four-year high — after strong earnings and a raised full-year outlook. Revenue rose 11% to $805 million, and operating margins more than doubled to 13.3%. The kicker: investors are starting to price identity security as the bottleneck for AI agents inside companies.

🛢️ President Trump announced a deal giving the U.S. majority control of more than 65 billion barrels of Venezuelan oil reserves. The arrangement, struck through a partnership with private business at no cost to taxpayers, "more than doubles American oil reserves," Trump claimed. Oil barely reacted Friday — WTI settled around $83.40, and crude still fell more than 4% on the week.

🌽 Corn and wheat futures hit their highest levels in more than three years. Wheat jumped 12.1% this week — its biggest weekly gain since March 2022 — on escalating Black Sea tensions, while corn is up 15.6% in August on a disappointing U.S. harvest. Food inflation is exactly what the Fed doesn't want to see.

🔻 Marvell Technology slid 10% Friday despite beating estimates, with sales up 37% and earnings up 50%. Investors focused on softer fiscal 2028 guidance and the lack of detail on the company's custom-chip deal with Google. After Nvidia's blowout, the bar for AI chipmakers is brutal.

💰️ Affirm jumped about 10% after posting what management called its most profitable quarter ever. Revenue rose 33% to $1.17 billion and gross merchandise volume climbed 36% to $14.1 billion, both ahead of estimates. The buy-now-pay-later trade broadened, with Klarna and Sezzle rallying too.

💵 Bitcoin briefly topped $81,000 Friday before sliding back toward $78,000 after Warsh's hawkish Jackson Hole speech. The roughly 3% pullback trims what's still a monster month — bitcoin remains on pace for its best August since 2017. Higher rates are kryptonite for risk assets like crypto.

For most of the year, the market's operating assumption was that AI would eat traditional software.

Why pay for SaaS subscriptions when AI models can do the work?

This week, that "SaaSpocalypse" trade fell apart. 

It started Thursday, when Salesforce rocketed 22.6% (its second-best day ever) after crushing earnings estimates and announcing an expanded partnership with AI lab Anthropic, alongside news that Agentforce, its AI-agent product, has reached $1.5 billion in annual recurring revenue.

CEO Marc Benioff didn't mince words: "This is not the SaaSpocalypse."

Then Friday, Elastic closed up 19% after beating on earnings and raising its full-year guidance. Earnings of $0.70 a share sailed past the $0.58 estimate, and revenue rose 15% to $478 million. ServiceNow, Zscaler, Asana and others rallied in turn.

Software has been one of the market's worst neighborhoods in 2026 precisely because investors feared AI would replace it.

This week's earnings told the opposite story: AI is driving demand for software. Companies need identity security for AI agents (Okta surged 28.6% on that pitch), search infrastructure to feed AI models (Elastic), and platforms to deploy agents on (Salesforce).

When a fear-driven discount unwinds across an entire sector at once, you get moves like Thursday's, and there's a lot of beaten-down software still repricing.

What to watch: 

• The rally gets stress-tested immediately. Dell reports Tuesday morning and Broadcom Wednesday (both key reads on AI hardware demand)

• Warsh's hawkish turn means every software multiple now has a rate-hike risk attached. If this week's winners hold their gains through a hostile Fed backdrop, the repricing is real.

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⚠️ Disclaimer: Not financial advice. Do your research before making any trades.