Software’s AI trade moves from fear to opportunity

TORONTO, Sep 1 (Reuters Breakingviews) - Software investors have mostly been responding to AI threats. Now, they finally have cause to think about opportunities. The rise of all-powerful programming assistants like Claude Code tanked the stocks of a host of app developers, including the likes of $215 billion stalwart Salesforce CRM.N or IT helpdesk tool ServiceNow NOW.N. The few exceptions were mostly cybersecurity providers expected to do brisk business defending against malicious chatbots. The rise of self-directed artificial helpers to boost productivity, though, is finally gaining traction.

AI-powered cyberattacks will continue to prey on the minds of executives. Investigators last week published a report into a particularly unnerving hack perpetrated by OpenAI models on open-source platform Hugging Face. As tools grow more capable, such breaches may only become more common. This dark side to the technology has been a bright spot for the likes of CrowdStrike CRWD.O and Cloudflare NET.N, which provide digital defenses. Both companies have seen their revenue grow nearly 30% annually since 2022, far above the roughly 17% pace of the broader Software Equity Group SaaS Index.