Software's AI comeback gathers pace
XLK•Software shares have recovered in recent weeks as investors reassess fears that AI could make parts of the industry obsolete. UniCredit says the sell-off was driven largely by valuation pressure, while AI adoption may create fresh demand opportunities.
1. Investors reassess software
Software stocks are staging a comeback after spending much of 2026 in the technology sector's “penalty box.” Earlier fears that AI agents could disrupt enterprise software triggered a sharp de-rating, despite resilient demand and earnings, while software shares significantly lagged chip stocks. UniCredit strategist Tobias Keller says enterprises are embedding AI in existing platforms, data and workflows rather than replacing their software stacks.
2. Where value may accrue
Keller says investors are looking beyond AI infrastructure providers to firms with proprietary data, mission-critical workflows and durable customer relationships. UniCredit says established enterprise software and cybersecurity platforms may be better positioned than investors initially assumed.
