In a week already marked by wild weather and Olympic glory, Wall Street is bracing for a pivotal moment that could redefine the direction of the stock market and the future of artificial intelligence. On Wednesday, February 26, 2026, after the market closes, two of the most closely watched companies in the tech sector—Nvidia and Salesforce—will release their latest financial results. The stakes are unusually high, as investors and analysts look for clues about the staying power of the AI revolution and its ripple effects across the broader economy.
It’s hard to overstate just how much artificial intelligence has turbocharged the market over the last three years. According to The Motley Fool and Barchart, the S&P 500 has soared 73%, while the Nasdaq Composite has rocketed up 99% as of late February 2026. These numbers blow past the historical average of 10% annual returns. Most experts agree: AI has been the fuel behind this blistering rally, with investors piling into companies seen as leaders in the space.
But beneath the surface, the story is getting complicated. As Opening Bell Daily reports, the market’s winners in 2026 look nothing like those from last year. While the S&P 500 itself has stagnated, there’s been a dramatic 26 percentage point gap between the best- and worst-performing sectors over the past seven weeks. Energy, materials, and industrials—industries tied to the physical infrastructure that underpins AI—have surged, with energy alone up more than 22% year-to-date. Meanwhile, technology stocks, especially those focused on software, have lagged behind or even fallen.
This rotation reflects a major shift in investor sentiment. The AI trade, which once favored asset-light, high-margin software companies, is now tilting toward the hardware and supply chain players that make AI possible. Semiconductor makers like Nvidia have become the new darlings, while software-as-a-service (SaaS) companies are suddenly on the defensive. As Stephanie Aliaga, a strategist at JPMorgan Asset Management, put it, "The rapid rise of AI agents, systems that can autonomously execute complex workflows, has raised questions about the demand for traditional software. If AI agents can perform tasks that previously required teams of employees, companies may need far fewer software licenses, compressing the per-seat subscription models that have underpinned SaaS valuations."
Nowhere is this new reality more evident than in the divergent fortunes of Nvidia and Salesforce. Nvidia, whose graphics processing units (GPUs) are the gold standard for running AI models in data centers, has seen its stock price explode by 1,200% since early 2023. The company’s Q3 fiscal 2026 results were jaw-dropping: $57 billion in revenue (up 62% year over year and 22% quarter over quarter) and diluted earnings per share of $1.30 (up 67%). CEO Jensen Huang was positively giddy in his remarks, saying sales of Nvidia’s Blackwell chips were "off the charts" and that "cloud GPUs are sold out."
Nvidia’s management is forecasting even more growth in the fourth quarter, guiding for record revenue of $65 billion (a 65% increase) and adjusted EPS of $1.45 (up 63%). Wall Street is even more optimistic, with consensus estimates at $65.7 billion in revenue and $1.53 EPS. Given that Nvidia now makes up about 7.4% of the S&P 500’s weighting, its results could swing the entire market. As Yahoo Finance noted, Nvidia’s earnings report is the "biggest market event on the agenda this week" and is widely seen as a bellwether for the broader AI trade and economy.
Salesforce, by contrast, is facing a far tougher crowd. Long considered the godfather of SaaS and the world’s leading cloud-based customer relationship management (CRM) platform, Salesforce has seen its stock tumble 30% since the start of 2026. The culprit? Fears that new AI tools—especially those from upstarts like Anthropic—could make traditional software offerings obsolete, sparking what some have called the "SaaSpocalypse." Investors are worried that if AI can automate tasks that once required teams of employees, companies will need fewer software licenses, threatening the subscription-based business models that have supported SaaS valuations for years.
Despite the gloom, Salesforce’s Q3 fiscal 2026 results weren’t bad at all: $10.3 billion in revenue (up 9% year over year), EPS of $2.20 (up 38%), and a 12% increase in remaining performance obligation (RPO) to $59.5 billion. RPO measures contractually obligated revenue that hasn’t yet been recognized, and when it grows faster than revenue, it’s usually a sign of strong future demand. Salesforce’s management is guiding for Q4 revenue of $11.2 billion (an 11% increase) and expects RPO to climb 15%. However, heavy investment in AI-related tools and services is expected to drag on profits, with EPS forecasted to drop 15%.
As Salesforce only represents 0.28% of the S&P 500’s weighting, its report may not move the market as dramatically as Nvidia’s. But as a bellwether for the SaaS industry, its results and management commentary will be scrutinized for any hint of what’s next for software stocks. Will the SaaSpocalypse come to pass, or is the panic overblown?
Jensen Huang, Nvidia’s CEO, certainly thinks the latter. In recent comments highlighted by The Motley Fool, he argued that fears about AI replacing software are misplaced. "There’s this notion that the software industry is in decline and will be replaced by AI," Huang said. "Would you use a hammer or invent a new hammer?" He continued, "There’s a whole bunch of software companies whose stock prices are under a lot of pressure because somehow AI is going to replace them. It is the most illogical thing in the world." In Huang’s view, AI is more likely to augment and leverage existing software solutions than to wipe them out entirely.
Meanwhile, the broader economic and geopolitical backdrop is adding extra uncertainty. CNBC reports that global tariffs are once again front page news, with President Trump announcing an increase in levies to 15% from 10% globally, effective immediately. On the diplomatic front, US-Iran nuclear talks are set to resume in Geneva on February 26, the same day as the earnings releases, underscoring the complex web of factors influencing markets right now.
All of this comes against a backdrop of historic milestones. On February 23, 2026, the US Olympic men’s hockey team captured their first gold medal in 46 years, defeating Canada in a dramatic overtime victory—a reminder that surprises can happen when you least expect them. And in a bit of market trivia, February 23, 1995, marked the first time the Dow Jones Industrial Average closed above 4,000, a midpoint in the 1990s bull run that ended with the dot-com bubble’s burst.
As investors await Nvidia’s and Salesforce’s reports, the market is at a crossroads. Will hardware continue to outshine software in the AI race? Are SaaS companies really doomed, or just adapting to new realities? Thursday’s market reaction will tell us a lot about where the smart money is headed next.
Whatever the outcome, one thing is clear: the AI revolution is shaking up the stock market in ways few could have predicted, and the next chapter is about to be written.