Which Software Companies Will Benefit from AI?

Investors are increasingly focused on the scope for artificial intelligence (AI) agents to disrupt the software sector by coordinating enterprise workflows and automating complex tasks. While technology investors are asking the right questions, there are signs that these concerns have been applied too broadly, according to Goldman Sachs Research.

“The recent selloff in software reflects a rapid shift in investor sentiment rather than a sudden deterioration in fundamentals,” Goldman Sachs Research analyst Matthew Martino writes in the team’s report. There are “credible paths for AI to reinforce rather than undermine long-term growth.”

Investors have recently focused on AI platforms that can manage and coordinate multiple agents. Announcements related to these new agent orchestration platforms helped to trigger the sharp revaluation of software stocks this year.

Are software stocks being disrupted?

“The concern is that if AI agents become the primary interface for executing work, traditional platforms could be relegated to passive data stores,” Martino writes. That could erode their pricing power and strategic relevance, which is why their stock prices have fallen.

Martino cites an analysis by Goldman Sachs Research portfolio strategists that suggests investors now expect software companies to grow more slowly. At their recent peak, software stock valuations implied a 15-20% medium-term (2028) revenue growth rate. Valuation multiples that are now much lower correspond to an expected growth rate of just 5-10%.

“We recognize that rapid AI innovation creates legitimate uncertainty and warrants a higher risk premium,” Martino writes. “Even so, we believe the repricing has been applied broadly rather than selectively.” This creates potential opportunities in software businesses where fundamentals remain intact despite elevated volatility, Martino says.

To understand the impact of AI on software companies, investors should take a closer look at differences in business models, end markets, and how well a product or platform delivers actual AI capabilities, according to Goldman Sachs Research. 

How to assess AI’s potential impact on software companies

The team has created an “AI impact framework” to assess how and where AI may create risks—and opportunities—for software makers. They suggest that investors consider six different aspects of a business:

• Orchestration risk: The possibility that horizontal AI agent layers can bypass the platform and become the primary generator of value
• Monetization model: Whether a business model is tied to users, which makes it more vulnerable, or assets and data, making it more durable
• System-of-record ownership: If the platform governs approvals, compliance, and execution, it is harder to displace
• Data and integration moat: Whether workflows depend on proprietary signals, structured data, and operational records that live inside the platform and must be accessed through it
• AI execution: Whether the company is delivering real, embedded capabilities rather than conceptual roadmaps
• Budget alignment: Determines whether AI adoption increases or decreases the strategic priority of the category

For some types of application software, agent orchestration could shift engagement and value capture over time, particularly for products that function as lightweight user interfaces and where the business model is monetized predominantly through seats or user licenses.

On the other hand, at the platform and infrastructure layer, the dynamic may be fundamentally different. Agents may change how work is initiated but generally increase the need for data management, workload orchestration, security and recovery. These are capabilities that sit beneath the user interface and are not easily bypassed.

“The core investment question is not whether agents will change software (they will),” Martino writes. He says it’s more important to look carefully at the software stack—the set of systems and tools used by an enterprise—to see where AI agents will disrupt and where they will reinforce existing products and platforms.

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