Artificial Intelligence (AI) has gone from turbocharging software to suddenly looking like its executioner, after Anthropic’s automation tools helped trigger a February selloff. That slide was driven by fears that AI assistants could replace whole categories of enterprise applications, pressuring software valuations even as many fundamentals stayed intact.
In that environment, Tom Lee of Fundstrat has argued that the “AI scare trade” in software is in its late stages, with much of the bad news already priced in and sellers largely exhausted, which is why he now frames the sector as a bottoming story rather than the start of another major leg lower.
His view naturally puts the iShares North American Tech-Software ETF (IGV) in focus, as it’s a go‑to gauge for big software. The fund has already surrendered a notable slice of its gains while concentrating a hefty chunk of its assets in five AI‑exposed heavyweights. Are we looking at the early stages of a quiet accumulation phase rather than another AI casualty list in the making? Let’s find out.
Software Stocks to Buy Now #1: Microsoft (MSFT)
Microsoft (MSFT) is a U.S.-based technology company that develops operating systems, cloud infrastructure, productivity software, and AI-powered enterprise tools.
The stock trades at $398.55 as of March 2, with a year-to-date (YTD) move of -17.59% and a 52-week change of +0.39%.
This $2.9 trillion giant changes hands at a premium forward P/E of 23.99x and a price-to-sales ratio of 10.35x, modestly above the sector’s 22.01x and 3.27x medians.
That premium is increasingly tied to AI. This year, the company extended its OpenAI arrangement so it will receive 20% of OpenAI’s total revenue through 2032 while locking in massive long-term Azure spending commitments.
The latest earnings support that narrative. This most recent quarterly report, released in late January 2026, showed Microsoft delivering EPS of $4.14 versus a $3.88 consensus estimate, a 6.70% positive surprise. It sets the stage for the next print, where the current March-quarter estimate sits at $4.05, up from $3.46 a year earlier, pointing to anticipated year-over-year (YoY) EPS growth of about 17.05% as AI and cloud workloads scale further.
Software Stocks to Buy Now #2: Palantir Technologies (PLTR)
Palantir Technologies (PLTR) is a software company based in Denver that builds data integration, analytics, and AI platforms for governments and enterprises worldwide.
The stock changes hands at $145.17 as of March 2, with a YTD move of -18.33% and a 52-week gain of +70.95%.
This $328.1 billion name trades at a premium 232.53x trailing P/E and a 2.64x PEG ratio versus sector medians of 22.94x and 1.40x.
That premium is increasingly anchored by real deployments, as Rackspace and Palantir partner to run Foundry and AIP in governed production, enabling fast hybrid and sovereign cloud AI rollouts while Rackspace scales from 30 to over 250 Palantir‑trained engineers.
This most recent fundamental update, released with Palantir's fourth-quarter 2025 numbers in early February 2026, showed adjusted EPS of $0.24 against a $0.17 consensus, a strong 41.18% upside surprise. It pointed to a business that is not just growing top line but also bending margins higher as deployments deepen.
The next catalyst is already on the calendar, with the upcoming May 4, 2026, print carrying a March‑quarter EPS estimate of $0.22 versus $0.04 a year ago, implying a bold 450% YoY earnings growth forecast.
That outlook is echoed by 26 analysts, which sits at a consensus “Moderate Buy” with an average $200.43 target, implying roughly 38% upside from the latest close.
Software Stocks to Buy Now #3: Oracle (ORCL)
Oracle (ORCL), a $417.8 billion Redwood Shores‑based software company, provides databases, enterprise applications, and cloud infrastructure. It returns cash via a forward $2 dividend, yielding about 1.38%.
ORCL sits at $149.25 as of March 2, with a YTD move of -23.43% and a 52-week change of -10.12%.
This valuation now reflects a forward P/E of 24.18x and a trailing P/E of 25.60x versus sector medians of 22.01x and 22.94x, scoring a modest premium.
This narrative showed up clearly in the most recent set of quarterly numbers, released in December 2025 for the fiscal quarter ended November 2025, where adjusted EPS of $1.95 topped the $1.29 estimate by 51.16%.
The next update is scheduled for March 9, 2026, with the current February‑quarter EPS estimate at $1.34 versus $1.18 a year earlier, pointing to expected YoY earnings growth of 13.56%.
Oracle’s Street consensus reflects that, with 42 analysts assigning a consensus “Strong Buy” stance and an average $284.02 target, which implies roughly 90% upside from the latest price.
Software Stocks to Buy Now #4: Salesforce (CRM)
Salesforce (CRM), based in San Francisco, delivers cloud‑based CRM, data, and AI platforms for enterprises.
Its stock trades at $192.95 as of March 2, with a YTD move of -27.16% and a 52‑week decline of -35.22%.
This $182.5 billion name is valued at a premium of roughly 1.33x on a PEG basis and 4.40x on price‑to‑sales, versus sector medians of 0.95x and 3.27x.
This just‑reported fiscal fourth quarter, released on Feb. 25, 2026, delivered revenue of $11.2 billion, up 12% YoY and 10% in constant currency, with $399M contributed by Informatica.
It pushed full‑year fiscal 2026 revenue to $41.5 billion, up 10% YoY and 9% in constant currency, again including that $399 million Informatica tailwind.
The same quarter produced EPS of $2.85 versus a $2.14 estimate, a 33.18% upside surprise. That strength carries into the outlook, with the next earnings release scheduled for May 27, 2026, and the current April‑quarter EPS estimate at $2.32 versus $1.94 a year earlier, implying a 19.59% YoY growth rate.
This fits neatly with a “Strong Buy” Street consensus of 51 analysts, with an average $287.79 target, which points to roughly 49% upside.
Software Stocks to Buy Now #5: Intuit (INTU)
Intuit (INTU), a Mountain View‑based software company, delivers tax preparation, small‑business accounting, and personal finance platforms for consumers and enterprises. This roughly $113.8 billion enterprise also returns cash through a forward annual dividend of $4.80 per share, translating to a yield near 1.17%.
INTU is trading at $419.06 as of March 2, with a YTD move of -36.74% and a 52‑week decline of -31.73%.
This premium profile now comes with a forward P/E of 23.74x and a price‑to‑sales multiple of 6.04x versus sector medians of 22.01x and 3.12x.
INTU recently expanded its AI ambitions by partnering with Anthropic, integrating Claude‑powered experiences across its financial software suite to enhance automation, insights, and customer outcomes.
Their most recent quarterly update, released in late February 2026 for the period ended January 2026, showed EPS of $2.83 versus a $2.23 consensus, a 26.91% positive surprise. It also grew total revenue to $4.7 billion, up 17% YoY, displaying robust demand across tax and small‑business ecosystems.
The next catalyst lands on May 28, 2026, with the April-quarter EPS estimate at $11.42 versus $10.44 a year ago, implying an expected 9.39% YoY earnings increase.
That outlook lines up with a “Moderate Buy” Street consensus from 31 analysts and an average $716.53 target, pointing to roughly 71% upside from the current price.
Conclusion
Tom Lee’s call doesn’t guarantee a straight line higher, but IGV’s leaders look fundamentally sturdier than the recent drawdown implies. Microsoft, Palantir, Oracle, Salesforce, and Intuit still bring solid earnings trends, visible AI investment, and strong balance sheets into the next phase of this cycle. Over time, the risks remain real, but sector leaders look better positioned for a slow, earnings‑led recovery than another collapse.
On the date of publication, Ebube Jones did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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