Beaten-down software stocks are bouncing back after a brutal selloff, which is good news for investors who bought the dip and still leaves room for latecomers.

• Software shares like Salesforce, Palantir, Atlassian, UiPath and Workday have been recovering since July after fears that AI would make their products useless.
• The panic pushed valuations so low that Salesforce borrowed heavily to buy back its own stock near current prices.
• A new trick called an orchestration "harness" cuts what software firms pay to run AI by around 40%, protecting their profits and squeezing the AI infrastructure and model sellers instead.
• Salesforce still has warning signs: it isn't raising prices, big consulting projects are shrinking, and costs are growing faster than sales.
• The deeper risk hasn't gone away — customers could eventually rebuild these tools themselves, especially in a recession when they hunt for costs to cut.

Outlook: The rebound likely has further to run while AI add-on sales keep growing faster than the old core business, but that growth rate is the number to watch for the next turn.