Software stocks are under massive pressure in 2026 and have lost a lot of value. But despite growing AI concerns, analysts see increasing opportunities in the sell-off for selected stocks.
• Software stocks under massive pressure from AI fears and capital outflows
• Analysts speak of an overreaction and point to robust business models
• Price targets indicate upside potential of up to 75 percent for individual stocks
Software under pressure: When AI becomes a burden
The start of 2026 was historically weak for software stocks. The S&P 500 index for software and services has fallen by double digits within a short period of time, accompanied by a massive reduction in market capitalization.
Investors fear that artificial intelligence could displace established software models and permanently slow down growth. The uncertainty is further compounded by a sector-wide reallocation, with capital flowing out of technology stocks and into supposedly more defensive areas.
According to Reuters, market observers are already talking about a real “software mageddon”. At the same time, it is emphasized that the sales are less due to specifically disappointing business figures, but primarily to the fear of structural changes caused by AI. Whether these concerns have already been fully priced into valuations is controversial among investors.
“The death of software is exaggerated”: Why analysts are betting against the trend
Despite the negative headlines, there is an increasing number of voices that consider the pessimism to be exaggerated. A report from YahooFinance shows that several analysts reject fears that classic software models will be quickly replaced by AI. DA Davidson analyst Gil Luria, quoted in the article, speaks of an exaggerated debate and explains: “If AI were actually ruining a company, the signs of it would have long been apparent.”
So far, AI has primarily caused reluctance on the part of customers, but not a collapse in demand. Analysts point out that software providers provide the infrastructure on which AI applications are built in the first place.
In addition, the business model is continuing to develop. Instead of purely user-based licenses, consumption-based billing is becoming increasingly important. Truist Securities analyst Terry Tillman emphasizes that autonomous AI agents could work around the clock and thus continuously generate billable usage. This opens up a new growth path for providers with clearly measurable added value.
Focus on Quality: Why ServiceNow and Shopify Stand Out
According to MarketWatch, analysts in the sold-out software sector are not betting on a blanket turnaround, but rather on a few stocks where valuation and medium-term earnings expectations could come together again.
Jefferies analyst Samad Samana expects investors to return to application software “as growth picks up, along with AI sales.” At the same time, he believes it is unlikely that AI and so-called “vibe coding” will completely displace classic B2B SaaS solutions. Instead, AI is likely toMonetization “gradually move up the value chain,” which could give software providers a tailwind.
Against this background, MarketWatch names ServiceNow and Shopify among the conspicuous candidates. Both values have fallen by more than 30 percent since the beginning of the year (as of: closing price on February 6, 2026). Nevertheless, both stocks receive support from positive analyst assessments: According to data from TipRanks, Wall Street analysts consider an average price target of $192.37 for ServiceNow to be realistic, which corresponds to an upside potential of around 97 percent compared to the last closing price of $100.74. For Shopify, the analyst consensus forecasts a price target of $180.58, implying a potential of around 61 percent from the last closing price of $112.05 (as of February 6, 2026).
Between hope and caution
At the same time, market observers are urging caution. According to Reuters, even optimistic investors are not talking about a quick turnaround, but rather a gradual revaluation. One portfolio manager is quoted as saying that while there is long-term value, clear signals from operations are needed before larger commitments are justified.
This means the picture remains differentiated: While fears of AI have placed a heavy burden on the software sector, analysts are increasingly seeing signs that the market is overstating the risks. Whether this actually results in sustainable share price gains will depend on how convincingly the companies manage the transition to the AI age operationally and financially.
Editorial team finanzen.net
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