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What Lies Ahead for Software Stocks & ETFs in AI Agent Economy?
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Key Takeaways
AI agents could disrupt seat-based SaaS models while creating new revenue streams.
Software stocks have rebounded as AI fears give way to a potential renaissance.
IGV and XSW have recovered, but AI agents could pressure traditional software demand.
The rise of artificial intelligence (AI) agents is changing how businesses use and pay for software. Gartner estimates that up to $234 billion of enterprise application spending could be at risk from agentic AI through 2030, as agents perform tasks across multiple software systems and reduce the need for traditional user interfaces. By 2030, this will make up roughly 20% of enterprise application software-as-a-service (SaaS) spending.
The ongoing shift toward an AI agent economy is a structural inflection point for software stocks—creating both disruption risks and new growth avenues. In the near term, software stocks could face renewed pressure as AI agents become more capable.
Software Stocks Were Hard-Hit in Early 2026
In early 2026, a wave of concerns swept across the software industry, triggering a sharp repricing of the sector. The Dow Jones U.S. Software Index, a benchmark for the U.S. software sector, fell about 36% from a record high on Oct. 28, 2025, to April 10, 2026, due to concerns about the impact of widespread AI adoption on software-as-a-service companies.
By Aug. 31, 2026, the index had recovered about 42.5% from its April low, per KraneShares. What drove such a dramatic swing, and has the software industry moved from fears of an AI-driven disruption to a potential renaissance?
Let’s delve a little deeper.
AI Agents Shake Up the Traditional SaaS Model
In early 2026, software stocks sold off sharply on fears that AI agents would cannibalize traditional seat-based licenses. The core concern: if AI agents do the work, fewer human users need logins — eroding the per-seat subscription revenue that underpins much of the SaaS sector.
The Renaissance Thesis: Agents as Co-Users
A counter-narrative is emerging: agents won’t replace software — they’ll become co-users that expand total workflow value. Applications designed as “agent environments” (usable by both humans and agents) are positioned to win, per the same KraneShares article.
Early data supports this: Salesforce reported that Agentforce and Data 360 ARR reached nearly $3.9 billion, up more than 210% year over year in Q2 FY27, while Agentforce ARR exceeded $1.5 billion, up more than 240%. Deloitte expects software pricing to increasingly move toward hybrid models combining subscriptions, usage and outcomes.
AI Can Create New Revenue Stream
Software companies that successfully embed AI agents into their platforms could create new revenue streams. Microsoft, for example, said it had more than 30 million paid Microsoft 365 Copilot seats, with Copilot increasingly incorporating agentic capabilities. Meanwhile, its Azure business continued to benefit from strong demand for AI services.
Focus on Selective Stocks?
Recent results show that AI is already helping some software businesses. Reuters reported that Snowflake's (SNOW - Free Report) AI offerings made up for about half of the recent acceleration in its growth, helping lift shares of several software peers like ServiceNow (NOW - Free Report) and Atlassian Corp (TEAM - Free Report) .
Snowflake CEO Sridhar Ramaswamy linked the growth acceleration to a broad range of AI products, including CoCo and CoWork, which are driving new AI workloads, agent adoption and higher overall platform consumption.
In this regard, ETFs like Dana Unconstrained Equity ETF (DUNK - Free Report) , Global X Cloud Computing ETF (CLOU - Free Report) and Themes Cloud Computing ETF (CLOD - Free Report) should gain ahead.
Software ETFs in Focus
The iShares Expanded Tech-Software Sector ETF (IGV - Free Report) fell more than 30% from its peak during the first half of the year. Although many software stocks have recovered, the expansion of autonomous AI agents could once again raise questions about demand for traditional software services. The fund IGV has added over 26% over the past six months while it is up only 4% so far this year (as of Sept. 22, 2026).
State Street SPDR S&P Software & Services ETF (XSW - Free Report) has added about 34% over the past six months while the fund is up about 9% in the year-to-date (as of Sept. 22, 2026).
However, companies could face renewed scrutiny in the near term if AI agents increasingly perform tasks that currently require users to interact directly with software platforms.
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Image: Bigstock
What Lies Ahead for Software Stocks & ETFs in AI Agent Economy?
Key Takeaways
The rise of artificial intelligence (AI) agents is changing how businesses use and pay for software. Gartner estimates that up to $234 billion of enterprise application spending could be at risk from agentic AI through 2030, as agents perform tasks across multiple software systems and reduce the need for traditional user interfaces. By 2030, this will make up roughly 20% of enterprise application software-as-a-service (SaaS) spending.
The ongoing shift toward an AI agent economy is a structural inflection point for software stocks—creating both disruption risks and new growth avenues. In the near term, software stocks could face renewed pressure as AI agents become more capable.
Software Stocks Were Hard-Hit in Early 2026
In early 2026, a wave of concerns swept across the software industry, triggering a sharp repricing of the sector. The Dow Jones U.S. Software Index, a benchmark for the U.S. software sector, fell about 36% from a record high on Oct. 28, 2025, to April 10, 2026, due to concerns about the impact of widespread AI adoption on software-as-a-service companies.
By Aug. 31, 2026, the index had recovered about 42.5% from its April low, per KraneShares. What drove such a dramatic swing, and has the software industry moved from fears of an AI-driven disruption to a potential renaissance?
Let’s delve a little deeper.
AI Agents Shake Up the Traditional SaaS Model
In early 2026, software stocks sold off sharply on fears that AI agents would cannibalize traditional seat-based licenses. The core concern: if AI agents do the work, fewer human users need logins — eroding the per-seat subscription revenue that underpins much of the SaaS sector.
The Renaissance Thesis: Agents as Co-Users
A counter-narrative is emerging: agents won’t replace software — they’ll become co-users that expand total workflow value. Applications designed as “agent environments” (usable by both humans and agents) are positioned to win, per the same KraneShares article.
Early data supports this: Salesforce reported that Agentforce and Data 360 ARR reached nearly $3.9 billion, up more than 210% year over year in Q2 FY27, while Agentforce ARR exceeded $1.5 billion, up more than 240%. Deloitte expects software pricing to increasingly move toward hybrid models combining subscriptions, usage and outcomes.
AI Can Create New Revenue Stream
Software companies that successfully embed AI agents into their platforms could create new revenue streams. Microsoft, for example, said it had more than 30 million paid Microsoft 365 Copilot seats, with Copilot increasingly incorporating agentic capabilities. Meanwhile, its Azure business continued to benefit from strong demand for AI services.
Focus on Selective Stocks?
Recent results show that AI is already helping some software businesses. Reuters reported that Snowflake's (SNOW - Free Report) AI offerings made up for about half of the recent acceleration in its growth, helping lift shares of several software peers like ServiceNow (NOW - Free Report) and Atlassian Corp (TEAM - Free Report) .
Snowflake CEO Sridhar Ramaswamy linked the growth acceleration to a broad range of AI products, including CoCo and CoWork, which are driving new AI workloads, agent adoption and higher overall platform consumption.
In this regard, ETFs like Dana Unconstrained Equity ETF (DUNK - Free Report) , Global X Cloud Computing ETF (CLOU - Free Report) and Themes Cloud Computing ETF (CLOD - Free Report) should gain ahead.
Software ETFs in Focus
The iShares Expanded Tech-Software Sector ETF (IGV - Free Report) fell more than 30% from its peak during the first half of the year. Although many software stocks have recovered, the expansion of autonomous AI agents could once again raise questions about demand for traditional software services. The fund IGV has added over 26% over the past six months while it is up only 4% so far this year (as of Sept. 22, 2026).
State Street SPDR S&P Software & Services ETF (XSW - Free Report) has added about 34% over the past six months while the fund is up about 9% in the year-to-date (as of Sept. 22, 2026).
However, companies could face renewed scrutiny in the near term if AI agents increasingly perform tasks that currently require users to interact directly with software platforms.