No, AI Isn’t Killing Software: OKTA & More Top Stocks to Pull From the Ashes of ‘SaaS-Pocalypse’

Why It Matters

Understanding which software firms can survive the AI‑driven rotation helps investors capture upside in a battered sector while avoiding broad, indiscriminate sell‑offs.

Key Takeaways

• Software sector underperforms Nasdaq, hitting century‑worst margin significantly.
• AI hype drives rotation, not outright death of software stocks.
• Oversold technical indicators suggest potential short‑term rebound in the market.
• Niche SaaS firms like Salesforce and security players may thrive.
• Okta highlighted for put‑selling strategy amid volatility and support zone.

Summary

The video examines the dramatic underperformance of software equities relative to the broader Nasdaq, noting that the sector has posted its worst relative returns since 2000. The host argues that the recent sell‑off is less about AI annihilating software and more about a profit‑taking rotation after a period of lofty AI‑driven valuations.

Technical analysis shows the sector is deeply oversold, with Bollinger bands indicating a three‑ to four‑sigma deviation and a potential “dead‑cat bounce.” The presenter highlights that while many software names are in the red, niche players—particularly those offering essential CRM tools like Salesforce or security solutions—are better positioned to weather the downturn.

Specific examples include Zoom, a mobile‑software firm (IDCL), and especially Okta, a cybersecurity identity‑management platform. Okta has lingered below its 200‑day moving average since September, yet it avoided a lower low in December and now sits near a demand zone. The host suggests naked‑put strategies targeting strikes within this zone, noting high implied volatility and a turning 50‑day moving average as bullish signals.

For investors, the takeaway is to avoid a blanket exit from software and instead scout for resilient, niche SaaS businesses. Security‑focused firms like Okta may offer both short‑term trading opportunities and longer‑term defensive exposure as AI agents increase the need for robust identity protection.

Original Description

Following the release of the latest artificial intelligence (AI) models, software stocks are being sold as if the business model itself is broken, in what’s being described – only half-jokingly – as a “SaaS–pocalypse.” The scale and speed of the selloff has pushed investors toward a dramatic conclusion: AI is killing software.

But in this software-focused video segment from Friday’s Market on Close, Senior Market Strategist John Rowland, CMT, argues a different case, and explains why this moment could bring software winners like $OKTA, $CRM, and more to the surface.

Watch the clip to get started, then head over to Barchart to screen $IGV components: https://www.barchart.com/etfs-funds/quotes/IGV/constituents