Briefly sharing some updated data on the absolute blood bath in software stocks as the market believes AI (such as Anthropic’s release of the legal plugin for its large language model Claude) will devour traditional software. Names like Microsoft (MSFT), ServiceNow (NOW) and Adobe (ADBE) are down big—yet still very profitable and growing. Will have more to say soon about specific names, but here is a look at 40+ top software stock ratings from Morningstar (moat ratings, BIG price upside potential and more). In a few years, you may look back and wish you bought more. Enjoy the data!
Software Application Stocks: Oversold
As the AI megatrend continues to grow, one of the lesser-noticed side effects within the technology sector has been the flow of dollars out of otherwise attractive software companies and into AI stocks. As a result, a lot of really attractive software stocks (those with high growth and high profits) are actually significantly underperforming the market and trading at increasingly attractive valuations.
10 Contrarian GARP Stocks to Buck the AI Bubble
If you are concerned about inappropriately high valuations for top growth stocks currently benefiting from recent AI hype (increasingly being described as an “AI bubble”), here are 10 top contrarian growth stocks with less ties to AI, but that still have healthy growth trajectories, much more reasonable valuations (e.g. low price/earnings to growth (PEG) ratios) and a lot of upside as per Wall Street analysts estimates. I currently own several of these names in my prudently concentrated/diversified, long-term, BH Disciplined Growth Portfolio. Enjoy!
20 Top Stocks at Risk of AI Disruption
A lot of attention is given to stocks "benefiting" from AI, but there are also plenty of businesses that will suffer because of it. This report highlights 20 businesses that could suffer significantly because of AI (i.e. investment returns could be decreased, stocks could meaningfully underperform expectations, the market and leading AI competitors). Several of the names on this list were absolute "untouchable" powerhouses just a few years ago, but are now feeling the pressure from AI. Enjoy!