Software Armageddon
Time to buy software? My favorite names, charts, thesis, and more.
Software has been destroyed over the last few months.
The issue with SaaS companies is that it’s very clear AI is going to disrupt software in a big way. There will be major losers, many are likely popular software stocks today.
But there will also be major software winners.
Right now, reality is that nobody knows which is which. If you asked 10 different market participants which software stocks would most likely win/lose because of AI, you would get a bunch of different-conflicting responses. So what’s the solution been for most market participants? Sell everything software and ask questions later.
The market has been telling us that they have no idea who will win in AI software, so they’re just selling everything instead of holding on and hoping they’re right. In my view, this is starting to resemble the semiconductor-AI stock DeepSeek moment last year. Instead of the DeepSeek moment, this could be coined the “Claude moment.”
The newest Anthropic Claude LLM proved that looking into the future, a business likely won’t need a bunch of different softwares to run a business. Instead, one could just use a single reliable LLM to do the work of 3-5 software applications.
The reason this is a bit different than the DeepSeek moment is because the AI stocks who got decimated by DeepSeek had previously shown clear AI gains, and it was pretty clear who the winners and losers were. Up to this point, Palantir seems to be the only definitive AI software winner. Outside of that, none of the software companies have shown exceptional earnings results as many DeepSeek casualties such as CRDO, ALAB, NVDA, AMD, NBIS, etc. did. That’s the main difference.
Before we get into this article, I want to highlight and mention that my 2026 Market Outlook was published last weekend, I’ll link it here. In this article I discuss how I’m thinking about the market and indices heading into the new year, my top individual stock and trade ideas for 2026, the themes I’m focused on and the specific names within them including thematic baskets you can own or trade, macro and micro analysis, key index levels, crypto, sector and industry breakdowns, international stocks, and more. It’s a big piece, but I think it’s well worth the read. I put my all into this outlook to help you prepare for the upcoming year, and I hope you find it useful.
It doesn’t hurt to dive into these software names to distinguish which ones may or may not have a shot at winning in AI. Preparation is a very important aspect of being a market participant… even if you don’t buy these stocks today or tomorrow, it helps to know exactly how they may or may not win in AI so when the software tide eventually does turn, you’re not scrambling looking for names to buy.
In the remainder of this article I’m going to discuss my favorite software names, which companies I think can “win” in AI, how they can win in AI, my bull and bear thesis for each name, their charts, and more
Let’s discuss.