Software Stocks Are Hot Again as Earnings Shows Resilience

The fast-growing software companies that took a pounding in this year’s technology stock selloff suddenly are stars of the market, and earnings are a big reason why.

Companies from Atlassian Corp. to Alteryx Inc. and Cloudflare Inc. have reported strong results, underlining tailwinds for the industry that bulls say remain intact even in a weaker economy.

At the same time, valuations have come down after the brutal first half and, just as importantly, sentiment toward the Federal Reserve has shifted and investors now are far less concerned that the central bank will go too far in raising interest rates.