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Is the AI Software Rebound Real? 5 Stocks Making the Case

Is the AI Software Rebound Real? 5 Stocks Making the Case

March 12, 2026

The AI Investing Pulse

March 12th, 2026

In this Week’s Edition:

Analysis - Is the AI Software Rebound Real? 5 Stocks Making the Case
Stock Ideas - Five AI Infrastructure Stocks With Nvidia-Scale Potential
News - Q4 Earnings Confirm AI Trade Is Intact, But Long-Term Questions Remain
Startups - Legora Triples Valuation to $5.55bn in $550m Series D
Trends - AI's Power Demands Put Energy and Grid Infrastructure in Focus
Other News - Wealth Managers Move from AI Pilots to Agentic Workflows

Is the AI Software Rebound Real? 5 Stocks Making the Case

The AIIP index gained +0.5% this week, but the gains were concentrated in infrastructure. Hardware and Infrastructure (+10.6% YTD), Networks and Connectivity (+8.8%), and Power and Cooling (+8.8%) remain the clear year-to-date leaders. The application layer is a different story: Application and Edge, where the software stocks covered in this article sit, is down 15.9% year to date. That gap between the infrastructure and application layers is exactly what the recovery thesis is trying to close, and it tells you how much ground the software names still need to recover.

What Is the Software Rebound Thesis?

The selloff in software stocks from mid-2025 into early 2026 was driven by fears that AI agents would replace the human workers who had previously used SaaS platforms, destroying the per-seat licence model underpinning companies like Salesforce and ServiceNow. This narrative, sometimes called the "SaaSpocalypse," compressed sector forward earnings multiples from 39x in early 2025 to around 21x by February 2026.

Q4 2025 earnings challenged that thesis. Rather than replacing SaaS platforms, enterprises are deploying AI agents on top of them and paying additional fees to do so. Salesforce's Agentforce closed 29,000 deals in Q4 2025, up 50% quarter-on-quarter. ServiceNow's Now Assist passed $600 million in annual contract value. Deutsche Bank upgraded US and European software to overweight on 10 March 2026, citing no evidence of negative AI revenue impact across any major software company's 2026 guidance.

Where Do These Stocks Stand Technically?

All five stocks began a meaningful recovery around 25 February 2026, following Intuit's strong earnings reaction. That rebound has since stalled. As of the week of 11 March, four of them are finding resistance at their 50-day moving averages and all remain below them. The fundamental case has improved; the chart confirmation has not arrived yet. That is the tension investors are navigating right now.

The five names below are among the most prominent software stocks that began rebounding around 25 February 2026.

1. Microsoft $MSFT ( ▼ 0.22% )

Sector / Industry: Technology | Software - Infrastructure
AI Stack Layer: Full Stack (Azure AI, Cloud Infrastructure, App and Edge, Developer and Training)
Market Cap: $3.01T
1 Week: -0.1% | YTD: -16.1%
AIIP Ranking: Momentum

The AI Thesis Microsoft is the only company in this list with meaningful AI revenue already recognised at scale. Copilot is deployed at 90% of Fortune 500 companies, and Azure AI contributed 16 percentage points to cloud growth in the most recent reported quarter. It is not building towards an AI monetisation story; it is already inside one.

Current Picture Microsoft holds the highest AIIP combined score of the five. The -16.1% YTD drawdown reflects sector-wide sentiment rather than any deterioration in its own fundamentals. Of the five names, it offers the least recovery upside from a valuation trade but carries the lowest execution risk.

2. Intuit $INTU ( ▼ 2.97% )

Sector / Industry: Technology | Software - Application
AI Stack Layer: Application and Edge (Financial Services, Tax and Accounting)
Market Cap: $121.8B
1 Week: +0.1% | YTD: -33.4%
AIIP Ranking: Momentum

The AI Thesis Intuit's AI advantage is not its technology stack; it is its data. Decades of proprietary financial, tax, and accounting data from QuickBooks and TurboTax gives it a training dataset that AI-native challengers cannot quickly replicate, underpinning automation across bookkeeping, tax preparation, and financial forecasting.

Current Picture Intuit triggered the sector rebound with a +17.6% week in late February 2026, its best single week since August 2001. Despite that move, the stock remains down 33.4% year to date, the largest YTD drawdown of the five names, reflecting how aggressively investors had priced in disruption risk before those results.

3. ServiceNow $NOW ( ▼ 0.84% )

Sector / Industry: Technology | Software - Application
AI Stack Layer: Application and Edge (Workflow Automation)
Market Cap: $120.9B
1 Week: +1.6% | YTD: -24.5%
AIIP Ranking: Momentum

The AI Thesis ServiceNow's AI play centres on enterprise workflow automation through Now Assist. Large enterprises typically run it alongside Salesforce rather than choosing between them, which reduces displacement risk and supports the case that AI adds to the platform rather than replaces it.

Current Picture Now Assist passed $600 million in annual contract value in Q4 2025, with Q4 revenue growing 21% year-on-year. The fundamental data shows strong revenue growth that contrasts with the 24.5% YTD drawdown; whether that gap narrows depends on how enterprise AI deployment trends develop through 2026.

4. Salesforce $CRM ( ▼ 0.4% )

Sector / Industry: Technology | Software - Application
AI Stack Layer: Application and Edge (CRM, Einstein AI)
Market Cap: $179.2B
1 Week: +0.5% | YTD: -26.7%
AIIP Ranking: Momentum

The AI Thesis Agentforce, Salesforce's agentic AI platform, closed 29,000 deals in Q4 FY26, up 50% quarter-on-quarter. Agentforce and Data Cloud ARR exceeded $2.9 billion, growing over 200% year-on-year. AI is generating a new revenue layer on top of the core CRM business, not cannibalising it.

Current Picture Q4 FY26 revenue reached a record $11.2 billion, up 12% year-on-year. The stock trades at approximately 15x forward earnings, below its five-year historical average despite accelerating AI revenue. The 26.7% YTD drawdown reflects how hard the SaaSpocalypse narrative hit Salesforce as the most visible CRM target.

5. Adobe $ADBE ( ▼ 0.52% )

Sector / Industry: Technology | Software - Application
AI Stack Layer: Application and Edge (Creative Tools)
Market Cap: $111.6B
1 Week: +0.2% | YTD: -21.8%
AIIP Ranking: Momentum

The AI Thesis Adobe's AI integration is built around Firefly, its generative AI platform embedded into Creative Cloud via usage credits within existing subscriptions. The thesis is not about new customer acquisition; it is about deepening subscription value to reduce churn and support upsell.

Current Picture Adobe carries the most uncertainty of the five, given its direct exposure to generative AI competition in creative tools. Early data points to improved enterprise retention from Firefly, though the commercial picture is less conclusive than Agentforce's deal volumes. It trades at a meaningful discount to its pre-selloff multiple, with recovery potential if the disruption narrative continues to fade.

Final Take

The Q4 2025 earnings season did not disprove the SaaSpocalypse thesis, it showed it was premature. Agentforce is closing deals. Now Assist is crossing contract value milestones. Deutsche Bank upgraded the sector. Coherent signals, but the stack data tells a more cautious story. Application and Edge was the worst-performing stack at -2.6%, all five stocks are stalling around the 50-day moving average resistance, and Morningstar cut moat duration assumptions for Salesforce, ServiceNow, and Adobe from 20 years to 10 in March 2026. That reflects something real about longer-term uncertainty.

Macro risk sits outside the AI narrative entirely. Escalating tensions involving Iran and oil price uncertainty could weigh on tech sentiment regardless of fundamental recovery, a sharp oil move tightens financial conditions and compresses growth stock multiples. Software names on elevated forward earnings expectations are not immune.

The honest position: the bear case was overpriced in February 2026. Whether it was entirely wrong is a question 2026 and 2027 earnings will answer.

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^{Not Investment Advice}^{: This content is provided by AI Investing Pulse for informational and educational purposes only. It does not constitute investment advice, a personal recommendation, or an invitation or inducement to engage in any investment activity.}^{Not Regulated}^{: AI Investing Pulse is not authorised or regulated by the Financial Conduct Authority (FCA) in the United Kingdom, is not registered with the Securities and Exchange Commission (SEC) or any state securities regulator in the United States, and is not registered with the Canadian Investment Regulatory Organization (CIRO) or any provincial securities commission in Canada.}^{Methodology Disclosure}^{: The AIIP Index scores and rankings mentioned in this article are generated by a proprietary quantitative methodology based on publicly available financial data. Our full methodology is explained in the "About AIIP" section below. These scores are objective system outputs, not recommendations or endorsements.}^{Risk Warning}^{: Investing in stocks involves risk, including the potential loss of principal. Past performance of stocks, scores, or rankings is not indicative of future results. Stock prices can decline as well as rise, and you may lose some or all of your invested capital.}^{Third-Party References}^{: References to analyst opinions, bank research, media publications, or the term "picks" refer to third-party selections, not AIIP recommendations. We aggregate this information for educational analysis only.}^{Seek Professional Advice}^{: Always consult a qualified, regulated financial professional who understands your personal circumstances before making any investment decisions. Consider your individual financial situation, risk tolerance, investment objectives, and time horizon.}

^{About AIIP -}^The^{AIIP Index}^{tracks 173 AI-focused public companies across the full AI stack, serving as our benchmark for sector performance. All scores are proprietary and calculated using data from}^{Finbox (powered by S&P Global Intelligence)}^.^{AIIP Total Score}^{(0–100) combines metrics for sales and EPS growth, financial quality, and valuation to assess overall business strength.}^{AIIP Relative Strength (RS) Score}^{measures a stock’s price performance relative to the AIIP 173 AI stocks.}^{Ranking Status}^{is based on score combinations:}^Fundamental^{: Total Score ≥ 70, RS < 80.}^Momentum^{: RS ≥ 80, Total Score < 70.}^Watchlist^{: Total Score ≥ 70 and RS ≥ 80}

TOP AI STOCKS PERFORMANCE

COMPANY	SECTOR	WEEKLY
Marvel Tech (MRVL)	Technology	19.5%
Nebius (NBIS)	Technology	17.1%
Evolv Tech (EVLV)	Technology	10.8%

TOP AI ETFs PERFORMANCE

ETFs	SECTOR	WEEKLY
Roundhill (CHAT)	Gen AI & Tech	5.3%
iShares (ARTY)	Future AI & Tech	2.4%
KraneShares (AGIX)	AI & Tech	0.9%

AI Stock Ideas

Five AI Infrastructure Stocks With Nvidia-Scale Potential – 247 Wall St

Lumentum, Marvell, Vertiv, and Micron each sit at a structural chokepoint in the AI supply chain. Micron's entire 2026 HBM supply is already sold out, yet the stock trades at roughly 9x forward earnings versus 25-30x for comparable AI infrastructure names.

ServiceNow and Salesforce Lead Beaten-Down SaaS Recovery Picks – Motley Fool

ServiceNow sits more than 50% below its 2025 peak, yet 40 of 44 covering analysts rate it a buy with a consensus price target implying 62% upside. Salesforce trades at 15x forward earnings with management guiding for accelerating growth in H2 fiscal 2026.

Citi Names Four Chip Stocks as Top AI Infrastructure Plays – Investing.com

Citi identifies Nvidia, Broadcom, Texas Instruments, and Monolithic Power Systems as its top semiconductor picks as data centres account for roughly 34% of all chip demand.

Amazon and Robinhood Flagged as Undervalued AI Plays – The Globe and Mail

Morgan Stanley ranks Amazon among companies best positioned for returns from physical AI and robotics, with median analyst targets implying 34% upside. Robinhood, now integrating AI into its trading platform, carries a consensus target implying 59% upside.

AI Stocks & ETFs News

Q4 Earnings Confirm AI Trade Is Intact, But Long-Term Questions Remain – Morningstar

Tech sector Q4 earnings came in strongly, with AI infrastructure spending showing no sign of slowing. Over 26% of currently undervalued stocks sit within tech, with more than two-thirds of those in software.

Oracle Q3: Cloud Infrastructure Revenue Up 84%, Guidance Raised to $90bn – Reuters

Oracle beat Q3 FY2026 estimates with total cloud revenue of $8.9 billion, up 44% year-over-year, driven by AI infrastructure demand. Remaining performance obligations surged 325% to $553 billion, with fiscal 2027 guidance raised to $90 billion.

Deutsche Bank Turns Overweight on Software as AI Disruption Fears Peak – StreetInsider

Deutsche Bank upgraded US and European software to overweight, finding no evidence that AI is negatively affecting revenues in 2026. US software earnings rose 29% in Q4, with no company in coverage guiding for a negative revenue impact from AI this year.

Morningstar Cuts Wide-Moat Ratings for Salesforce, ServiceNow, and Adobe – Morningstar

Morningstar downgraded moat ratings for six software companies, shortening its moat duration assumption from 20 years to 10. Major platforms retain distribution advantages in the agentic AI era, but excess returns are no longer viewed as near-certain over the long term.

AI Startups

Legora Triples Valuation to $5.55bn in $550m Series D – CNBC

Swedish legal AI startup Legora raised $550 million led by Accel, tripling its October 2025 valuation of $1.8 billion in under five months. The company has over 800 customers across 50 markets and is accelerating a US expansion targeting 300 employees by year-end.

Kai Launches with $125m to Build Agentic Cybersecurity Platform – FinTech Global

Kai has emerged from stealth with $125 million to build an agentic AI platform that detects and responds to cyber threats at machine speed, bridging IT and operational technology security.

Yann LeCun's AMI Labs Raises $1.03bn to Train World Models – BetaNews

AMI Labs, co-founded by Yann LeCun after leaving Meta, raised $1.03 billion in Europe's largest-ever seed round, backed by Nvidia and Bezos Expeditions.

AI Trends

AI's Power Demands Put Energy and Grid Infrastructure in Focus – Forbes

Hyperscalers are on track to spend close to $700 billion on data centres in 2026, with $1.4 trillion estimated as the total electrification bill by 2030. Nuclear, natural gas, and grid modernisation plays are increasingly discussed alongside the usual AI stocks.

Who Controls Semiconductors Controls the Future of AI – Medium

AI chips now represent roughly 50% of semiconductor revenue despite less than 0.2% of unit volume, with bottlenecks in high-bandwidth memory and advanced packaging constraining how fast infrastructure can scale.

Others

Wealth Managers Move from AI Pilots to Agentic Workflows – Hubbis

Private wealth managers and family offices are moving from AI experimentation into live agentic deployments covering compliance, portfolio analysis, and client engagement. UBS is scaling its AI transformation out of Singapore while firms like Azimut build agent-ready architecture across advisory workflows.

The Cost of Letting AI Decide – The Harvard Crimson

Tara Malhotra argues that AI tools can improve the quality of high-stakes decisions when used with appropriate human oversight, pushing back on concerns that AI-assisted reasoning leads to reduced accountability.

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