AI isn't killing software. It's forcing a reset.
We're three years into the AI cycle. If software was going to get wiped out, we'd see bodies by now. The real hit so far was sentiment: cautious buyers, delayed deals, and a story that made CFOs wait. That pause is fading, and money is moving back to the vendors that run critical infrastructure.
Why Wall Street is buying software again in 2026
Valuations have cooled to rational levels. Customers are less frozen. And the supposed "business killers" haven't shown up at the gate. Investors are focusing on platforms that secure data, observe systems, orchestrate workflows, and monetize usage-where AI workloads actually live.
Analyst playbooks: who stands to benefit
D.A. Davidson
- Commvault (CVLT): Data protection and cyber recovery with margin rebound. 50%+ upside potential; price target $220.
- Manhattan Associates (MANH): Supply chain software with subscription acceleration and ROIC north of 100%. Price target $250.
- Zeta Global (ZETA): Replacing legacy marketing tech. Price target $29.
- Box (BOX): "Enterprise Advanced" upgrades lifting ARPU. Price target $45.
- Datadog (DDOG): Complete observability for complex, AI-heavy environments. Price target $225.
Piper Sandler
- Rubrik (RBRK): SaaS transition largely complete. Price target $75.
- Nutanix (NTNX): Taking share as VMware customers reevaluate. Price target $50.
- Axon (AXON): Recurring model in public safety with drone integration. Price target $563.
Truist Securities
The knee-jerk bear case-fewer human seats means fewer licenses-misses the shift. Agentic AI works 24/7, so consumption models fit better than seat counts.
- ServiceNow (NOW): Early in the move to usage-linked billing. Price target $781.
- JFrog (FROG): Mid-transition to consumption. Price target $65.
- Snowflake (SNOW): Gold standard for usage-based pricing. Price target $220.
For finance teams, plan around billable events-compute, data processed, and transactions-more than headcount. Strong metering, governance, and daily ROI proof points will separate the durable names from the rest.
What to watch next
- Deal velocity: Are delayed projects unclogging? Track backlog conversion, pipeline, and net retention.
- Unit economics: Consumption should surface value in real time. Watch gross margin resilience, cloud cost leverage, and R&D tied to new AI use cases.
- Workload intensity: More agents create more logs, backups, and data flows. That lifts demand for observability, security, and data platforms.
Bottom line: Wall Street isn't chasing hype. It's buying durable infrastructure at sane multiples while AI expands workloads instead of erasing them.
If you're updating pricing and revenue models, this primer on usage-based pricing is a useful reference.
Need practical tools to quantify AI impact across FP&A, risk, and deal teams? Explore our curated AI tools for finance.
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