Shares of RingCentral and Five9 surged sharply after strong earnings reports alleviated investor concerns about artificial intelligence’s impact on their business models. RingCentral’s stock rose 34%, while Five9 increased 14%, driven by better-than-expected results and optimistic guidance. Both companies, which specialize in customer service solutions like voice integration, noted that accelerating AI adoption boosted demand for their services. Recent AI developments from firms like Anthropic and OpenAI had previously sparked fears of disruption within the software sector, leading to a selloff reflected in the iShares Expanded Tech-Software Sector ETF’s 23% decline this year. However, RingCentral reported a doubling of annual recurring revenue linked to AI tools, integrating ChatGPT into its offerings. Five9 also highlighted significant growth in enterprise AI bookings, reaching $100 million in annual recurring revenue. CEO Michael Burkland emphasized that while AI advancements continue, traditional customer service cannot rely solely on large language models.
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