When software stocks lost over $300 billion in market value this week, most analysts were writing obituaries. Dan Ives was writing shopping lists.
The Wedbush managing director and global head of tech research, who’s built a reputation for being right when everyone else panics, just published a note that basically said: Relax. This isn’t Armageddon. It’s a sale.
The timing couldn’t be more dramatic. The IGV software index is down 18% year-to-date while the S&P 500 sits roughly flat. It’s the worst selloff since the “Liberation Day” market crash. And the fear driving it is specific and terrifying for software companies.
The AI threat is real
Here’s what has investors spooked.
Anthropic and OpenAI are releasing tools that automate high-value work, legal analysis, sales processes, marketing campaigns, stuff that traditionally required expensive software subscriptions. About 80% of CIOs are now focused on implementing AI and machine learning capabilities. Translation: they’re shifting budgets away from traditional software vendors toward AI initiatives.
The nightmare scenario goes like this. Why would enterprises pay millions for seat-based software when AI agents can do the same work for a fraction of the cost? Why maintain bloated software infrastructure when you can just plug directly into frontier AI models?
It’s a legitimate concern. But Ives thinks the market is catastrophizing.
Why the panic is overblown
Ives’ counter-argument is straightforward. Enterprises have spent decades and tens of billions of dollars building software infrastructure. They’ve accumulated trillions of data points ingrained in these systems. They’re not going to rip everything out and migrate to OpenAI or Anthropic overnight, not when it puts their data at risk.
“Many customers won’t be willing to put their data at risk to capitalize on AI implementation strategies until there is less risk with these migration projects,” Ives wrote.
Plus, the new AI players don’t have the capacity to hold all enterprise data and protect organizational structures from malware. Enterprises need security, access controls, lineage, governance before they let AI touch production systems. They can’t just bypass their existing platforms and connect frontier models directly to their data.
Is AI a headwind for software in the near-term? Absolutely. But Ives thinks the magnitude of this selloff is “a major head scratcher” that’s pricing in an apocalypse far from reality.
Dan Ives’ five must-own stocks
So which stocks should you buy during this garage sale? Ives named five: Microsoft, Palantir, CrowdStrike, Snowflake, and Salesforce. Each has a specific competitive moat.
Microsoft is Ives’ top pick with a $575 price target. Currently down over 12% this year, Microsoft is positioned to accelerate cloud and AI monetization through Azure and its massive partnership with OpenAI. The company is embedding AI capabilities across its 365 ecosystem, giving it distribution to enterprises that want trusted AI systems. Ives believes the Street underestimates Azure’s growth story, with 2026 set to be an inflection year.
Palantir Technologies gets a $230 price target, implying 46% upside from current levels around $130. Despite being lumped into the software selloff, Palantir is seeing unprecedented demand for its Artificial Intelligence Platform, especially in commercial and federal markets. The key insight: as enterprises move from AI experimentation to production, Palantir’s value proposition becomes more relevant, not less. Speed-to-deployment and outcome-driven ROI matter more than raw model performance. Ives thinks Palantir has “a golden path to becoming a trillion-dollar market cap company.”
Snowflake has been hammered the hardest, down over 23% this year to around $165. But Ives has a $270 price target. His thesis: enterprises won’t bypass data platforms to connect directly to AI models. They need that trusted layer between enterprise data and external models. Snowflake provides the security and governance that AI needs before it can interact with production systems. This positions Snowflake as essential AI infrastructure, not a victim of AI disruption.
Salesforce is down more than 21% this year, trading around $199. Ives has a $375 target. The market is overlooking Salesforce’s differentiated position, its massive pool of sticky customer data collected over decades. That data, now leveraged through Agentforce and the Informatica acquisition, provides the rich, trusted context that AI agents need to function effectively. The moat isn’t going anywhere.
CrowdStrike rounds out the list with a $600 price target, versus current levels around $415. The cybersecurity play is industry agnostic. AI is disrupting everything, but that makes securing workloads and operations even more essential. CrowdStrike’s Charlotte AI-driven security orchestration operates across domains, identities, and endpoints. As AI usage increases, so does the need for gold-standard cybersecurity.
The valuation question
The elephant in the room, especially for Palantir, is valuation. These stocks aren’t cheap by traditional metrics. Palantir’s already up 1,700% over three years. Its forward P/E ratio makes value investors queasy.
But Ives has consistently argued that focusing too much on current valuation metrics causes investors to miss game-changing tech players. Those metrics don’t account for earnings several years out. What matters is the earnings track record, product strength, market outlook, and long-term prospects.
The bottom line
Will all five stocks hit Ives’ price targets in the next 12 months? Probably not. But his broader thesis is compelling. The software apocalypse narrative assumes enterprises will abandon infrastructure they’ve spent decades building. It assumes new AI players can instantly replace complex, integrated software ecosystems. It assumes companies will sacrifice security and governance for cost savings.
That’s not how enterprise IT works.
The companies that win are those that bridge traditional software infrastructure with AI capabilities, that offer trust and security, that have sticky customer relationships and proven track records. Microsoft, Palantir, CrowdStrike, Snowflake, and Salesforce fit that profile.
Is this a garage sale or the beginning of the end for software? If Dan Ives’ track record means anything, and it does, smart money is shopping.
Sonia Boolchandani is a seasoned financial writer She has written for prominent firms like Vested Finance, and Finology, where she has crafted content that simplifies complex financial concepts for diverse audiences.
Disclosure: The writer and her his dependents do not hold the stocks discussed in this article. The website managers, its employee(s), and contributors/writers/authors of articles have or may have an outstanding buy or sell position or holding in the securities, options on securities or other related investments of issuers and/or companies discussed therein. The content of the articles and the interpretation of data are solely the personal views of the contributors/ writers/authors. Investors must make their own investment decisions based on their specific objectives, resources and only after consulting such independent advisors as may be necessary.