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5 Software Stocks That Could Keep Soaring as AI Disruption Fears Fade
Software stocks soared on Monday as investors grow increasingly confident that artificial intelligence (AI) will serve as a powerful growth catalyst rather than an existential threat to the industry's business models.
Earlier concerns that generative AI could commoditize software products, compress pricing power, and disrupt incumbent vendors have begun to fade as companies demonstrate the ability to embed AI features into their platforms, drive customer adoption, and unlock new revenue opportunities.
Keeping this in mind, here are five software stocks that investors may want to keep an eye on as they may continue to rally if AI disruption fears continue to fade.
Atlassian – TEAM
Zacks Rank #1 (Strong Buy)
As a global leader and innovator in the enterprise collaboration and workflow software space, Atlassian stock was well oversold on technical indicators but has rebounded nearly 60% over the last three months despite still being down roughly 30% year to date (YTD).
This comes as investors have recognized Atlassian's strong enterprise demand and record deal closures. As suggested by its strong buy rating, the rally in Atlassian stock could very well continue considering EPS estimates for fiscal 2026 and FY27 have spiked 17% and 13% in the last 60 days, respectively.
Datadog – DDOG
Zacks Rank #2 (Buy)
Datadogis a monitoring and analytics platform for developers, IT operations teams, and business users in the cloud age and has seen its stock skyrocket 150% in the last three months.
Although Datadog was previously oversold due to AI fears, shares have surged to new all-time highs as analysts have highlighted strong observability leadership that could lead to even more upside with regard to its position as a top industry-defining platform for understanding the health, performance, and behavior of modern cloud systems.
Docusign – DOCU
Zacks Rank #2 (Buy)
Backed by favorable analyst ratings, Docusign stock has been rebounding on the strength of its underlying fundamentals and growing adoption of its Intelligent Agreement Management (IAM) platform, which is expanding the company's growth opportunities beyond traditional e-signature services.
Still trading roughly 40% below its 52-week high of $94 a share, Docusign hasn't staged a dramatic recovery like some of the other software stocks on this list but has climbed more than 15% over the last month as investors grow increasingly optimistic about the company's AI-driven product strategy and long-term growth prospects.
Intuit – INTU
Zacks Rank #2 (Buy)
Like Docusign, Intuit stock has also been flagged as oversold despite robust recurring revenue from its accounting and tax preparation software services such as TurboTax, QuickBooks, and Credit Karma. Still, analysts maintain high confidence even with Intuit stock falling more than 40% YTD and trading around $350 a share compared to a 52-week and all-time high of over $800.
Optimistically, FY26 and FY27 EPS estimates are modestly higher in the last two months, with Intuit’s annual earnings expected to increase 16% this year and projected to rise another 15% next year to $27.03 per share.
Snowflake – SNOW
Zacks Rank #3 (Hold)
Rounding out the list is Snowflake, a cloud-native software platform built to unify structured, semi-structured, and unstructured data, and is considered the heart of the AI Data Cloud.
Snowflake stock fell to new lows last year after investors feared that AI-driven software-as-a-service (SaaS) disruption could weaken its business model. That said, Snowflake’s financial results and AI adoption data have shown those fears were overblown, leading to a 60% rebound in the last three months and hitting a new 52-week high of over $280 a share in today’s trading session.
Bottom Line
The rebound in software stocks has been fueled by a combination of improving fundamentals and easing uncertainty. To that point, enterprise spending trends remain resilient, cloud demand continues to strengthen, and management teams across the software landscape are reporting growing customer interest in AI-powered solutions.
Rather than replacing traditional software vendors, AI is increasingly being viewed as an accelerator for productivity, automation, and workflow efficiency — benefits that many established software companies are well positioned to monetize through their existing customer bases.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Zacks Investment Ideas feature highlights: Atlassian, Datadog, Docusign, Intuit and Snowflake
For Immediate Release
Chicago, IL – June 2, 2026 – Today, Zacks Investment Ideas feature highlights Atlassian (TEAM - Free Report) , Datadog (DDOG - Free Report) , Docusign (DOCU - Free Report) , Intuit (INTU - Free Report) , Snowflake (SNOW - Free Report) .
5 Software Stocks That Could Keep Soaring as AI Disruption Fears Fade
Software stocks soared on Monday as investors grow increasingly confident that artificial intelligence (AI) will serve as a powerful growth catalyst rather than an existential threat to the industry's business models.
Earlier concerns that generative AI could commoditize software products, compress pricing power, and disrupt incumbent vendors have begun to fade as companies demonstrate the ability to embed AI features into their platforms, drive customer adoption, and unlock new revenue opportunities.
Keeping this in mind, here are five software stocks that investors may want to keep an eye on as they may continue to rally if AI disruption fears continue to fade.
Atlassian – TEAM
Zacks Rank #1 (Strong Buy)
As a global leader and innovator in the enterprise collaboration and workflow software space, Atlassian stock was well oversold on technical indicators but has rebounded nearly 60% over the last three months despite still being down roughly 30% year to date (YTD).
This comes as investors have recognized Atlassian's strong enterprise demand and record deal closures. As suggested by its strong buy rating, the rally in Atlassian stock could very well continue considering EPS estimates for fiscal 2026 and FY27 have spiked 17% and 13% in the last 60 days, respectively.
Datadog – DDOG
Zacks Rank #2 (Buy)
Datadogis a monitoring and analytics platform for developers, IT operations teams, and business users in the cloud age and has seen its stock skyrocket 150% in the last three months.
Although Datadog was previously oversold due to AI fears, shares have surged to new all-time highs as analysts have highlighted strong observability leadership that could lead to even more upside with regard to its position as a top industry-defining platform for understanding the health, performance, and behavior of modern cloud systems.
Docusign – DOCU
Zacks Rank #2 (Buy)
Backed by favorable analyst ratings, Docusign stock has been rebounding on the strength of its underlying fundamentals and growing adoption of its Intelligent Agreement Management (IAM) platform, which is expanding the company's growth opportunities beyond traditional e-signature services.
Still trading roughly 40% below its 52-week high of $94 a share, Docusign hasn't staged a dramatic recovery like some of the other software stocks on this list but has climbed more than 15% over the last month as investors grow increasingly optimistic about the company's AI-driven product strategy and long-term growth prospects.
Intuit – INTU
Zacks Rank #2 (Buy)
Like Docusign, Intuit stock has also been flagged as oversold despite robust recurring revenue from its accounting and tax preparation software services such as TurboTax, QuickBooks, and Credit Karma. Still, analysts maintain high confidence even with Intuit stock falling more than 40% YTD and trading around $350 a share compared to a 52-week and all-time high of over $800.
Optimistically, FY26 and FY27 EPS estimates are modestly higher in the last two months, with Intuit’s annual earnings expected to increase 16% this year and projected to rise another 15% next year to $27.03 per share.
Snowflake – SNOW
Zacks Rank #3 (Hold)
Rounding out the list is Snowflake, a cloud-native software platform built to unify structured, semi-structured, and unstructured data, and is considered the heart of the AI Data Cloud.
Snowflake stock fell to new lows last year after investors feared that AI-driven software-as-a-service (SaaS) disruption could weaken its business model. That said, Snowflake’s financial results and AI adoption data have shown those fears were overblown, leading to a 60% rebound in the last three months and hitting a new 52-week high of over $280 a share in today’s trading session.
Bottom Line
The rebound in software stocks has been fueled by a combination of improving fundamentals and easing uncertainty. To that point, enterprise spending trends remain resilient, cloud demand continues to strengthen, and management teams across the software landscape are reporting growing customer interest in AI-powered solutions.
Rather than replacing traditional software vendors, AI is increasingly being viewed as an accelerator for productivity, automation, and workflow efficiency — benefits that many established software companies are well positioned to monetize through their existing customer bases.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.
Today you can access their live picks without cost or obligation.
See Stocks Free >>
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.