tech
January 29, 2026
These 2 stocks getting unfairly slammed in the software sector rout are buys
Every weekday, the Investing Club releases the Homestretch; an actionable afternoon update just in time for the last hour of trading.
TL;DR
- Software stocks experienced significant declines on Thursday, including Microsoft, ServiceNow, Salesforce, and SAP.
- The selloff in software is attributed to a market revaluation of SaaS companies, leading to compressing price-to-earnings multiples.
- Microsoft's stock dropped due to concerns about resource allocation, particularly regarding its Azure cloud service and AI initiatives like Copilot.
- Cybersecurity companies CrowdStrike and Palo Alto Networks were also negatively impacted, despite AI potentially increasing the importance of their services.
- High price-to-earnings multiples are a concern for cybersecurity stocks, even though the article suggests they face little disruption from AI.
- Upcoming earnings reports from Apple, SanDisk, Western Digital, Deckers, Stryker, American Express, Verizon, Chevron, Exxon Mobil, Sofi, Colgate Palmolive, and Air Products & Chemicals are anticipated.
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