Okay, so the S&P North American Technology Software Index is down 30%? Thirty percent! It’s like watching your fantasy football team implode after you spent all summer meticulously researching kickers. Everyone’s freaked out about AI disrupting things, which, honestly, is the tech industry’s favorite pastime. Disrupt! Innovate! Pivot! It’s exhausting. But before you start selling everything and investing in canned goods, let’s talk to someone who actually builds the stuff.
Enter Jensen Huang, CEO of Nvidia (NVDA +8.01%). And he’s saying this whole software sell-off is…illogical? Illogical! As if logic has ever been a consistent feature of the stock market. It’s a little like telling someone to remain calm while their parachute fails to open. Still, I’m listening. Because frankly, my portfolio could use a win.
Jensen Huang Says Negativity Surrounding Software Stocks is Warranted…But Overdone
The panic stems from these new AI tools that basically write code for people. Apparently, programmers are worried they’ll be replaced by algorithms. Which, let’s be real, is a valid fear. It’s like the robots finally decided to take our jobs, but instead of starting with manufacturing, they went straight for the white-collar crowd. Anthropic’s ‘Cowork’ is the latest culprit, and everyone’s decided this means the end of software as we know it. Huang thinks that’s…a bit much. He says it’s like saying the hammer is obsolete because we have power drills. Which, okay, fair point. You still need someone to hold the drill.
He’s suggesting companies will add AI to their existing software, not replace it entirely. It’s a good analogy. It’s like adding sprinkles to your ice cream. Does it change the fundamental ice cream experience? No. Does it make it slightly more enjoyable? Absolutely. And let’s be honest, a little joy is desperately needed right now. So, which companies are looking like the best bets in this AI-fueled chaos? Let’s dive in, shall we?
These AI Software Stocks (Down 24% to 73%) Look Attractive at Current Prices
Microsoft (MSFT +2.00%) is throwing AI copilots into everything, and people are actually paying for them. 160% increase in paid seats? That’s…impressive. And the stock is down 27%? It’s like they’re giving money away. Adjusted earnings up 24% last quarter? That’s a company that’s figured out how to make the sprinkles stick.
Datadog (DDOG +4.80%) monitors performance for those big language models. Which is a fancy way of saying they make sure the AI doesn’t crash and burn. They’ve launched an AI agent that automates incident investigation. Basically, it’s like a digital detective for software problems. Down 47%? A little pricey at 53 times earnings, but justifiable if they keep growing at 20% despite all the R&D spending. Someone’s paying for all those digital magnifying glasses.
AppLovin (APP +8.46%) has this machine learning engine called Axon that targets ads. Apparently, it’s really good. The secret? They own a mediation platform that helps publishers make money. It’s like they’re spying on everyone to figure out what ads we’ll click on. Down 52%? 45 times earnings? And earnings increased 96% last quarter? That’s…alarming and impressive at the same time.
Atlassian (TEAM 3.60%) has integrated this AI assistant called Rovo. It helps non-technical teams search and summarize information. Which means marketing people can finally figure out what everyone else is talking about. Down 70%? 22 times earnings? And earnings increased 27% last quarter? That’s a steal. Someone send me the bargain bin.
HubSpot (HUBS +4.07%) has AI tools that automate sales, marketing, and customer service. They connected their platform to ChatGPT, Claude, and Gemini. It’s like they’re trying to be friends with all the cool AI kids. Down 73%? 25 times earnings? And earnings increased 22% last quarter? That’s…suspiciously good. I’m starting to think they’re hiding something.
Look, software stocks might keep dropping. The market is a fickle beast. But if you’re patient, and you buy companies that are actually making money, you might just end up with a decent return. Just don’t blame me if the robots take over anyway.
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2026-02-08 12:03