Catenaa, February 10, 2026 – Citi says several software stocks can perform well across different artificial intelligence scenarios. The bank argues that recent market volatility has created valuation gaps that do not reflect underlying fundamentals.
In a research note, Citi said investor fears around AI disruption have pressured software valuations. The analysts believe those concerns are too broad. They argue that AI adoption will affect companies unevenly rather than disrupt the sector outright.
Citi highlighted Dynatrace, Microsoft, Cloudflare, and Rubrik as stocks positioned to multiple AI outcomes. The analysts said these companies combine recurring revenue with strong customer demand. They also benefit from scalable platforms that support AI workloads.
Dynatrace may gain from rising demand for application monitoring and automation tools. Citi said AI adoption increases system complexity, which raises the need for observability software.
Microsoft stands out due to its diversified business model. Citi pointed to the company’s ability to integrate AI across cloud, productivity, and enterprise services. This breadth helps limit downside risk if AI spending shifts.
Cloudflare benefits from its global network and security offerings. Citi said growing AI traffic should increase demand for performance optimization and cybersecurity services. Rubrik also drew attention for its focus on data protection, which becomes more critical as AI use expands.
Citi also named stocks it views as relative winners in a bearish “AI disruption” scenario. These companies may prove more defensive if AI pressures software pricing or margins.
Palantir Technologies sits among those buy-rated names. Citi said Palantir’s government exposure and long-term contracts provide revenue stability. Its data analytics platform also aligns well with AI-driven decision tools.
The analysts emphasized that earnings trends remain resilient across many software firms. Several names continue to show positive earnings revisions despite recent share price declines.
Citi said investors should focus on cash-flow durability and real-world AI use cases. Short-term sentiment swings may obscure long-term value creation.
The firm concluded that AI disruption will gradually reshape software markets. Companies with proven business models may emerge stronger over time.
