Concerning Software, AI, and a Few Worthy Wagers

Now, I’ve seen a good many bubbles inflate and burst in my time – land speculation in the Dakota Territory, railroad stock, even tulip bulbs, bless their fleeting beauty. And this here fuss about Artificial Intelligence supplanting honest-to-goodness software? Smells a bit like one of those again. Folks get carried away with the newfangled, forgetting that most inventions just shift the work around, not eliminate it altogether. They’re saying software is dead? Why, that’s like declaring the horse and buggy obsolete the moment someone tinkered with an internal combustion engine! A bit hasty, wouldn’t you say?

Old John Zito, a fellow with Apollo Global Management – a name that suggests they’re aiming for the heavens, though I suspect they’re mostly concerned with earthly gains – he posed the question: “Is software dead?” A dramatic query, to be sure. The iShares Expanded Tech-Software ETF has taken a proper drubbing, down twenty-one percent this year, and a good portion of that in the last week. Seems investors are spooked, and rightly so, when they see a shiny new toy threaten the old. But a wise man doesn’t throw out the baby with the bathwater, does he?

Now, Mr. Jensen Huang of Nvidia – a fellow who seems to know a thing or two about these electric brains – he’s saying this whole notion of software being replaced is “the most illogical thing in the world.” A strong statement, coming from the man fueling this very AI boom. And I reckon he’s onto something. AI, you see, isn’t going to replace the tools; it’s going to need ’em. It’s like saying a blacksmith is obsolete just because we’ve invented the steam hammer. The hammer needs an operator, and a good one at that. And software, my friends, is the operator.

So, with that in mind, let’s have a look at a few companies that have been unfairly tossed aside in this AI panic. A man’s gotta put his money somewhere, and I’ve a hunch these three might just reward a bit of patience.

1. Microsoft

Microsoft, now there’s a name that’s been around the block a few times. They’ve dominated enterprise software for a generation, and they’re much more than just software these days. Their Azure cloud business is growing like a weed – up thirty-nine percent last quarter, mind you – and they’ve got fingers in a good many other pies: Windows, gaming, LinkedIn, GitHub. A diverse fellow, that Microsoft. Now, even a diversified giant can get a bit bruised in a stampede, and Microsoft’s stock has fallen a quarter from its peak. Investors are fretting over capital expenditures for this AI cloud business. But a bit of investment is a small price to pay for future prosperity, wouldn’t you agree? They’re trading at a discount to the S&P 500, and that, my friends, is a bargain worth considering.

2. Shopify

Shopify, now that’s a company that’s built a real empire in the world of e-commerce. They’ve become the go-to platform for everyone from mom-and-pop shops to Fortune 500 companies. It’s a dominant force, and a rare one at that. They’re down thirty-eight percent from their peak, which seems a bit harsh. Disrupting all those capabilities – web design, marketing, fulfillment, payments – with AI? A tall order, indeed. And Shopify isn’t just standing still; they’re incorporating AI into their platform with Shopify Magic, automating content creation and improving customer service. Revenue is up thirty-two percent to $2.8 billion last quarter. They’re still pricey, trading around 100 times free cash flow, but a good thing rarely comes cheap, does it?

3. Figma

Figma, now there’s a young upstart that’s ruffled a few feathers in the design software world. Challenging Adobe, a behemoth that tried to swallow it whole for a cool twenty billion dollars! They’re growing rapidly and, surprisingly, profitable. But they’ve taken a proper tumble, down eighty-five percent from their peak and a third from their IPO price. A bit of overenthusiasm, perhaps, followed by a dose of reality. Design software seems vulnerable to AI, but Figma is already integrating it into their product suite. And, mark my words, Figma skills are in demand. Job postings on LinkedIn and elsewhere are clamoring for folks who know their way around the platform. It’s a valuable asset, both for design and for career advancement. They’re trading at a price-to-sales of around 10, which isn’t exactly cheap, but if they can maintain a growth rate of around 30% and deliver profits, I suspect better days are ahead.

Now, I’m no fortune teller, and the market is a fickle beast. But I reckon these three companies have a good chance of weathering this AI storm. They’re solid businesses with strong fundamentals, and they’re trading at reasonable prices. A bit of patience, and a bit of luck, might just reward a fellow handsomely.

2026-02-05 07:32

1. Microsoft

2. Shopify

3. Figma

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