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Actions of RingCentral And Five9 jumped Friday after earnings from two software companies allayed recent fears that artificial intelligence eats away at their business models.
RingCentral jumped 34%, while Five9 rose about 14% after at the top of Wall Street estimates and provide optimistic guidance. The two companies, which provide customer service solutions such as voice integration, said accelerated adoption of AI has driven demand.
New AI tools, capable of creating apps and websites in minutes, have scared investors in recent weeks, leading to a massive sell-off in the software sector.
The concern is that these products, derived from products like Anthropic And OpenAIwill replace long-standing business models in the software-as-a-service industry as companies rely on faster and more efficient AI tools.
So far this year, the iShares ETF for the broad technology software sector sector tracking plunged about 23%, leading to a decline by Atlassian, Unity software And Fast7which have lost more than half their value.
Software giants Sales force And Microsoft fell by 30% and 18% respectively.
RingCentral, which is up about 36% this year after a 17% decline in 2025, has called AI a positive factor in its business, telling investors Thursday that annual recurring revenue from customers using the tools has doubled year over year to nearly 10%.
The company also recently Built-in ChatGPT templates in its voice AI product.
Elsewhere, Five9 told investors that its enterprise AI bookings more than doubled from a year ago, leading to a slight increase in its order book. Management also said the company’s AI portfolio reached $100 million in annual recurring revenue.
Chairman Michael Burkland told analysts on an earnings conference call Thursday that Five9 leverages large language models, or LLMs, to improve the solutions it offers its clients, while maintaining an “absolute competitive moat.”
“We’re going to continue to benefit from advancements through LLMs, but I already said this two years ago, you can’t run a customer service organization with an LLM,” he said.
Five9 shares are down 3% this year, following a 51% sell-off in 2025.
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