Beaten-down software stocks RingCentral and Five9 rally as earnings quell some AI concerns
#RingCentral #Five9 #AI adoption #software stocks #earnings reports #customer service solutions #market volatility #business transformation
📌 Key Takeaways
- RingCentral stock jumped 34% and Five9 rose 14% after earnings alleviated AI concerns
- Both companies reported accelerating AI adoption is boosting demand for their services
- RingCentral's AI-related revenue doubled year-over-year to nearly $10 billion
- Five9's enterprise AI bookings more than doubled year-over-year
- The broader software sector has declined 23% this year due to AI disruption fears
📖 Full Retelling
Software providers RingCentral and Five9 saw their stocks surge on Friday after quarterly earnings reports alleviated investor concerns that artificial intelligence would disrupt their business models, with RingCentral jumping 34% and Five9 rallying 14% after both companies reported accelerating AI adoption was boosting demand for their customer service solutions. The impressive performance came as both firms exceeded Wall Street's expectations and issued optimistic guidance, demonstrating that rather than being disrupted by new AI tools, they are successfully leveraging these technologies to enhance their offerings. RingCentral, which had previously declined 17% in 2025, told investors during Thursday's earnings call that its annual recurring revenue from customers using AI tools had doubled year-over-year to nearly $10 billion, while Five9 reported that its enterprise AI bookings more than doubled from a year ago, leading to an increase in its backlog and hitting $100 million in annual recurring revenue for its AI portfolio. The broader software sector has been under pressure recently, with the iShares Expanded Tech-Software Sector ETF plunging about 23% this year amid fears that new AI capabilities from companies like Anthropic and OpenAI would displace traditional software-as-a-service business models, though these latest results suggest that established players are successfully adapting to the AI revolution rather than being rendered obsolete.
🏷️ Themes
AI adoption, business transformation, market volatility, software sector performance
📚 Related People & Topics
RingCentral
American communications firm
RingCentral, Inc. is an American provider of cloud-based communication and collaboration products and services. The company is headquartered in Belmont, California with other US offices in Denver, Charlotte, and Dallas.
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In this article RNG FIVN Follow your favorite stocks CREATE FREE ACCOUNT Pavlo Gonchar | Lightrocket | Getty Images Shares of RingCentral and Five9 surged on Friday after earnings from both software firms alleviated recent fears that artificial intelligence is eating away at their business models. RingCentral popped 34%, while Five9 rallied about 14% after topping Wall Street's estimates and issuing upbeat guidance. Both companies, which provide customer service solutions like voice integration, said accelerating AI adoption has boosted demand. New AI tools, capable of building apps and websites in a matter of minutes, have spooked investors in recent weeks, leading to a massive selloff across the software sector. The worry is that these products, emerging from the likes of Anthropic and OpenAI , will displace the software-as-a-service industry's longstanding business models as firms lean on quicker and more efficient AI tools. So far this year, the iShares Expanded Tech-Software Sector ETF tracking the sector has plunged about 23%, led to the downside by Atlassian , Unity Software and Rapid7 , which have shed more than half their value. Software giants Salesforce and Microsoft have dropped 30% and 18%, respectively. Read more CNBC tech news Tesla loses bid to toss $243 million verdict in fatal Autopilot crash suit Meta and Apple face serious questions about child safety and privacy From 'vanlords' to safe parking sites: How RVs became Silicon Valley's housing safety net Who's laughing now? China's humanoid robots go from viral stumbles to kung fu flips in one year RingCentral, which is up about 36% this year after a 17% slump in 2025, called AI a tailwind to its business, telling investors on Thursday that annual recurring revenue from customers using the tools doubled year over year to nearly 10%. The company also recently integrated ChatGPT models into its voice AI product. Elsewhere, Five9 told investors that its enterprise AI bookings more than doubled from a y...
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