"AI has really landed a heavy shot on some of the software names, especially the SaaS (Software as a Service) companies that have been quite slow to brace for the rise of the artificial intelligence (AI) age. Undoubtedly, with agents, robotics, and all sorts of transformative and revolutionary disruptive tech up ahead, standing pat and resisting change could be the formula for a tremendous fall from grace."
"Yet, investors remain quite skeptical because the net impact from the rise of AI may still be negative. Undoubtedly, with AI coders getting better by the day, the value of software might be headed for further deterioration. At the same time, there are software companies that are in a position to embrace the wave of change. Even if it means cannibalizing other parts of the business, pivoting and adapting, I think, is key to staying relevant in the age of fast-moving AI-driven disruptive innovation."
"In this piece, we'll check in on a software name that has been under considerable pressure for a number of years now. And while AI may be more of a risk or cause for concern than an opportunity for certain companies, I do see the following names as undervalued, with AI strategies that look poised to work as the AI winds of disruption move in."
AI has strongly impacted many software and SaaS companies that were slow to prepare for the AI era. Emerging technologies such as agents and robotics increase risk for firms that resist change and may cause steep declines. Many software firms have pivoted in response to AI disruption, but investors remain skeptical because the overall impact could be negative. Improvements in AI coding risk further deterioration of software value. Some companies can embrace AI, cannibalize legacy offerings, and adapt to stay relevant. Not all firms will survive the AI tide, yet some can reinvent themselves. Adobe shares plunged about 55% from highs and trade near 18.2 times trailing P/E.
Read at 24/7 Wall St.
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