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Additional Reading from MarketBeat.com Software Stocks Are Down—Expert Says These 3 Names Still Look StrongBy Bridget Bennett. Publication Date: 3/17/2026. 
Key Points - Software stocks are being repriced as investors distinguish between companies that benefit from AI and those whose products may be easier to replace.
- Kuran Francis of FinTek highlighted CrowdStrike, Zscaler and Datadog as software names he sees as better positioned in this environment.
- Francis flagged Adobe as a higher-risk case, arguing its seat-based model could face more AI-driven pressure than the market expects.
- Special Report: Elon Musk's $1 Quadrillion AI IPO
Software stocks have been under pressure, but not every company in the sector deserves to be sold off. In a recent conversation with Kuran Francis of FinTek, he highlighted a key shift reshaping the software landscape: investors no longer view AI as an automatic positive for every tech company. That distinction matters. Some software businesses will become more valuable as AI adoption grows, while others could face real pressure if their products become easier to replace. Francis described the moment as one where investors must separate the software winners from the losers. As Francis explained, "the difference between the losers and the winners is only going to get bigger over time." In the discussion, three companies stood out as names that may still have strong upside despite the recent downturn, while one major company landed in the category to avoid. Why Software Stocks Are Selling Off Francis traced the broader software weakness to rising concern that newer AI tools are starting to replace parts of existing software workflows. The issue is not just that AI helps companies work faster. Some tools are moving closer to doing the work directly, which threatens business models built around seat-based pricing. When a company charges per human user, AI could weaken that model if a single agent can perform tasks that once required multiple employees. Francis said the market is realizing "AI isn't just going to sort of lift all boats in technology," creating a more selective environment for software investors. The takeaway: companies that directly benefit from AI demand, or that price based on usage rather than seats, may be in a much stronger position than the market currently recognizes. CrowdStrike Still Looks Built for This Environment The first name Francis highlighted was CrowdStrike Holdings (NASDAQ: CRWD), with the argument centered on cybersecurity becoming even more critical in an AI-heavy world. If AI makes it easier for bad actors to launch attacks, demand for advanced security tools should rise — one reason Francis thinks CrowdStrike may be unfairly lumped in with weaker software names. He noted hackers are already using generative AI to scale attacks, citing CrowdStrike's research showing more AI-enabled threats and zero-day vulnerabilities. That reinforces the view that cybersecurity demand should remain strong. Importantly, CrowdStrike wasn't created by trying to bolt AI onto an older platform. Its system was built around identifying suspicious patterns with machine learning long before AI became the market's buzzword, giving it a stronger moat than many traditional software providers. Zscaler Offers Another Cybersecurity Angle The second bullish name was Zscaler (NASDAQ: ZS), which Francis described as a different kind of cybersecurity play. Where CrowdStrike focuses on identifying and stopping threats, Zscaler concentrates on controlling access and securing connections between users and systems. That role grows more important as work shifts to the cloud and AI agents interact directly with systems. Francis emphasized Zscaler's zero-trust approach — authenticating every interaction rather than trusting by default — a framework that could gain value as businesses adopt AI while trying to limit operational risk. He also argued Zscaler hasn't benefited from the same AI "halo" that lifted some other names, which helps explain why the stock hasn't recovered as sharply as peers, despite its relevance to AI-driven security. Datadog May Be the Overlooked Name The third company was Datadog (NASDAQ: DDOG), perhaps the least talked-about of the group but one Francis finds especially interesting. Datadog helps companies collect, monitor and use data across applications, infrastructure and security systems. In an AI economy, high-quality, organized data is foundational — better data leads to better AI outcomes. Francis argued Datadog solves a core enterprise problem: making data usable. He also highlighted a business-model advantage: unlike many seat-based vendors, Datadog charges based on usage. That means whether the customer is a human employee or an AI agent, Datadog still gets paid. Francis called the stock "kind of a hidden gem," suggesting the market may be underestimating its role as companies embed AI into operations. The Software Stock to Avoid The one name Francis advised caution on was Adobe (NASDAQ: ADBE). The concern isn't that Adobe lacks strong products, but that parts of its business model may be exposed to AI disruption. Adobe has long benefited from seat-based pricing in creative software, and if AI reduces the need for multiple individual users, that pricing structure could come under pressure. Francis suggested Adobe may be entering turnaround territory. "If they continue as if it's business as usual, I think the stock is going to continue dropping from here," he said. That doesn't mean Adobe has no path forward, but investors may be betting on a successful strategic pivot rather than on a business already aligned with where the market is heading. | 
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