AI disruption fears sparked a tech sell-off last week, with the software sector getting slammed, but JPMorgan thinks the big drop has created an opportunity to buy the dip in a handful of stocks.
Analysts highlighted several software names they believe are well-positioned despite AI disruption concerns that have dragged the sector to “deeply pessimistic levels.”
“Within Technology, this perceived risk of disruption has driven sell-offs in both Quality and Speculative Growth Software names indiscriminately,” the analysts wrote.
The analysts say the reasons investors should buy the dip include:
- Worst-case scenario for AI disruption in software is unlikely
- There is a positive outlook for the broader tech space
- Software-sector positioning is at extreme lows
- Strong fundamentals, with valuations tumbling to the lows seen around last year’s Liberation Day
- Software earnings are supportive
Here are some of JPMorgan’s “AI-Resilient” software stock picks that could weather renewed disruption fears.
