By Jeremy Bowman, The Motley Fool
Publication Date: 2026-02-05 04:50:00
The “SaaSpoclaypse” continues, but one top tech leader thinks it’s overblown.
Software stocks have been tumbling this year, and the reason is clear. Investors are suddenly afraid that AI will disrupt software, and there are signs that tools like Anthropic’s Claude Cowork is already threatening to do so. Software stocks related to legal work, for example, plunged on Tuesday after the AI start-up released a new productivity tool for in-house lawyers.
This theory was summed up by John Zito of the private equity giant Apollo Global Management, who told an audience last fall that the real risk of AI was, “Is software dead?”
This year, the AI disruption theory has clearly gained steam with the iShares Expanded Tech-Software ETF (IGV 4.97%), which tracks most of the major software stocks, down 21% year-to-date, with a majority of those losses coming in the last week.
However, Nvidia CEO Jensen Huang pushed back on that notion in an interview on Tuesday at the Cisco AI Summit, saying, “This notion that the software industry is in decline and being replaced by AI (is) the most illogical thing in the world and time will prove itself.” As he sees it, AI will use existing tools rather than reinventing them, so he expects AI to run with the help of existing software platforms.
As the leader of the company driving the AI boom, Huang may have his finger on the pulse of AI more than anyone else.
Taking a cue from him, let’s look at three software stocks that look like smart buys after…
