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shares of ring central and five nine Earnings from both software companies helped ease recent concerns that artificial intelligence was undermining their business models, sending their stocks soaring on Friday.
RingCentral soared 34%, while Five9 rose about 14% after reporting a positive outlook, beating Wall Street expectations. The companies, which provide customer service solutions such as voice integration, said demand is increasing due to accelerated adoption of AI.
New AI tools that allow you to build apps and websites in minutes have taken investors by surprise in recent weeks, leading to a sharp decline across the software sector.
The fear is that as companies rely on faster and more efficient AI tools, these products emerging from the likes of Anthropic and OpenAI will displace the software-as-a-service industry’s long-standing business model.
This year so far, iShares Enhanced Technology Software Sector ETF The sector has plunged about 23%, with the following factors contributing to the decline: atlassian, unity software and rapid 7lost more than half of its value.
major software company sales force and microsoft They decreased by 30% and 18%, respectively.
RingCentral, which is up about 36% this year after a 17% slump in 2025, says AI is a tailwind for its business, telling investors on Thursday that annual recurring revenue from customers using its tools has doubled from a year ago to nearly 10%.
The company recently integrated the ChatGPT model into its voice AI product.
Elsewhere, Five9 told investors that bookings for enterprise AI more than doubled from a year ago, leading to a growing backlog. Management also said the company’s AI portfolio reached $100 million in annual recurring revenue.
Chairman Michael Birkland told analysts on Thursday’s earnings call that Five9 leverages large-scale language models (LLMs) to enhance its solutions for customers, but remains “absolutely competitive.”
“We will continue to see advances with LLMs, but as I said two years ago, you can’t run a customer service organization with an LLM,” he said.
Five9 stock is down 3% this year after falling 51% in 2025.
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