Software stock investors have had plenty of reasons to be bearish lately. New AI agents were expected to cut into valuable software revenue streams, and many analysts were ready to put the ‘per-seat’ business model on life support. But in the months following the software stock meltdown, a funny thing happened: these fears failed to materialize meaningfully in earnings. In fact, many of the companies with supposedly at-risk recurring revenue streams saw sales growth accelerate in the first quarter of 2026, and these stocks are now trading well below their historic valuation levels.
Is it time to nibble on software stocks? Sentiment toward the sector remains very negative, and Morgan Stanley flagged SaaS debt as a concern, noting that 46% of software loans mature over the next four years. But the apocalyptic predictions appear to have been off base, and many software companies now see AI as a tailwind. We’ll focus on a pair of software stocks that suddenly look appealing from a fundamental and technical perspective.
