Software stocks and AI threat: six names analysts expect to keep growing

Software stocks AI threat worries have not stopped investors from rushing back into the group as chip shares lose steam, according to MarketWatch, and a new screen points to a very short list of companies expected to keep sales growth accelerating.

MarketWatch reported that Workday, Autodesk, Palantir Technologies and ServiceNow were among the biggest S&P 500 winners on Monday, with gains around 7% or more. The move helped the iShares Expanded Tech-Software Sector ETF rise 3.3%, while the VanEck Semiconductor ETF fell 2.3%.

The shift carried into Tuesday’s trading, MarketWatch said, with Accenture and Workday among the S&P 500’s leading gainers as pressure on chip stocks deepened. The iShares software ETF was up another 1.3% in midday trading.

Evercore ISI analyst Kirk Materne told clients Tuesday that the top 25 semiconductor and hardware companies have about $22 trillion in combined market value, according to MarketWatch. His point: even a small move of money out of chips and into software can show up fast.

Which software stocks could withstand the AI threat?

MarketWatch screened software companies for expected sales growth, using FactSet consensus estimates, and found only six in the S&P Composite 1500 with projected revenue growth from 2026 through 2028 above their growth rate from 2022 through 2025.

The six companies identified in the wider screen were:

• DigitalOcean: sales CAGR of 16.1% from 2022 through 2025, projected at 28.7% from 2026 through 2028; forward P/E of 78.4; 2026 stock gain of 150% through July 27; market value of $14.1 billion.
• Oracle: sales CAGR of 9.9%, projected at 25.7%; forward P/E of 14.1; 2026 stock decline of 38%; market value of $345.4 billion.
• Trimble: sales CAGR of negative 0.8%, projected at 6.1%; forward P/E of 14.4; 2026 stock decline of 29%; market value of $13 billion.
• Corsair Gaming: sales CAGR of 2.3%, projected at 4.8%; forward P/E of 14.1; 2026 stock gain of 77%; market value of $1.1 billion.
• Electronic Arts: sales CAGR of 0.4%, projected at 2.3%; forward P/E of 23.1; 2026 stock gain of 2%; market value of $52.4 billion.
• Teradata: sales CAGR of negative 2.5%, projected at 1.4%; forward P/E of 10.7; 2026 stock decline of 2%; market value of $2.8 billion.

The screen began with 79 software stocks in the S&P Composite 1500, which includes the S&P 500, S&P MidCap 400 and S&P SmallCap 600, according to MarketWatch. It was narrowed to 64 companies with FactSet sales estimates through calendar 2028 from at least five analysts.

A separate look at the S&P 500 software group showed how rare accelerating growth estimates are. Among 24 software names with FactSet revenue estimates through 2028, MarketWatch said only Oracle, Electronic Arts and Trimble were expected to grow sales faster in 2026 through 2028 than they did from 2022 through 2025.

The bounce comes after a rough year for software. MarketWatch reported that the S&P 500 software industry group is still down 18% in 2026, as investors worry that artificial intelligence could disrupt demand. IBM also recently said, according to MarketWatch, that customers had less room in budgets for broad software products because more money was going toward hardware and cybersecurity.

Salesforce was cited as one example of the slowdown problem. FactSet data showed its revenue grew at a 9.9% compound annual growth rate from calendar 2022 through 2025, while consensus estimates point to a lower 6.3% rate from 2026 through 2028.

Oracle stands out on valuation in the MarketWatch data. Its forward price-to-earnings ratio was 14.1 as of Monday’s close, down from 25.3 at the end of last year and from a 2026 peak of 30.9 on June 1, though the stock has been pressured by concern over spending on AI data centers.

This story draws on original reporting from MarketWatch.