JPMorgan Flags 19 Software Names as AI-Resilient Amid Market Selloff

Recent market turbulence has driven software stocks into bear territory, but JPMorgan strategists argue investors may be pricing in AI disruption too aggressively. The bank’s analysis suggests that certain software businesses possess structural advantages that make them resilient to artificial intelligence disruption—creating a potential buying opportunity for savvy investors.

Market Fears May Be Overdone

According to JPMorgan’s Global Markets Strategy team, the current market positioning and extreme bearishness on AI’s impact on the software sector have created distorted pricing. “Given the positioning flush, overly bearish outlook on AI disruption of software and solid fundamentals, we believe the balance of risks is increasingly skewed towards a rebound,” explains Dubravko Lakos‑Bujas, Head of Global Markets Strategy at the bank.

The strategists contend that markets are currently pricing in near-term AI disruption scenarios that appear disconnected from reality. The sharp selloff has generated what they view as an attractive setup for rotation back into higher-quality software names with demonstrated resilience to AI-driven transformation.

The Resilient 19: Enterprise Fortress Builders

JPMorgan flags 19 software companies with particular resilience to AI-related disruption. The bank identifies Microsoft Corporation (NASDAQ:MSFT) and CrowdStrike Holdings, Inc. (NASDAQ:CRWD) as prime examples—businesses positioned to benefit from AI-driven workflow improvements while maintaining protective moats around their enterprise customer bases.

What creates this competitive durability? High switching costs and multi-year contracts with corporate clients significantly reduce the risk of sudden disruption. These structural factors provide the foundation for sustained revenue stability.

Beyond the headline names, JPMorgan flags an additional 17 software companies with comparable resilience: Twilio Inc. (NYSE:TWLO), Okta Inc. (NASDAQ:OKTA), ServiceNow Inc. (NYSE:NOW), Palo Alto Networks Inc. (NASDAQ:PANW), Zscaler Inc. (NASDAQ:ZS), Check Point Software Technologies Ltd. (NASDAQ:CHKP), SentinelOne Inc. (NYSE:S), Snowflake Inc. (NYSE:SNOW), Datadog Inc. (NASDAQ:DDOG), Veeva Systems Inc. (NYSE:VEEV), Guidewire Software Inc. (NYSE:GWRE), CoStar Group Inc. (NASDAQ:CSGP), Tyler Technologies Inc. (NYSE:TYL), JFrog Ltd. (NASDAQ:FROG), SailPoint Inc. (NYSE:SAIL), Netskope Inc. (NASDAQ:NTSK), and Q2 Holdings Inc. (NYSE:QTWO).

Profit Expansion Already Underway

JPMorgan’s Global Investment Strategist Kriti Gupta observes that the selling has been indiscriminate, affecting even companies positioned to benefit from AI infrastructure demand. However, she highlights a critical countertrend: corporate AI adoption is already improving profitability across the market.

Companies within the S&P 500 that have integrated AI tools are experiencing net margin expansion approximately 2 to 3 percentage points greater than non-adopting peers and the broader index. This data suggests AI is already delivering tangible productivity gains rather than representing merely speculative disruption risk.

Market Technicals

The selling pressure has been substantial. The State Street SPDR S&P Software & Services ETF (NYSE:XSW) has declined 20.58% year-to-date as of early 2026, reflecting the broad-based repricing across the sector. While concerns about agentic AI potentially rendering certain software products obsolete have driven some of this reaction, JPMorgan argues the market has overcorrected—and names with pricing power, enterprise entrenchment, and proven profitability improvements offer compelling value at current levels.