By Paul R. La Monica

It might be time to pause the funeral dirge for software and services stocks. Artificial intelligence hasn't killed them after all.

In fact, companies are going out of their way to remind investors that AI is as much an opportunity as it is an existential threat. Such damage control could revive their stocks after this year's brutal selloff, driven by fears that AI would render software and services providers irrelevant.

When design software developer Figma reported earnings Wednesday, it stressed that its own AI tools and partnerships with ChatGPT owner OpenAI and Gemini parent Alphabet were boosting customer retention figures. The company also posted strong sales for the latest quarter and upbeat guidance. The stock, while still down sharply year to date, rose 8% Thursday and is up more than 15% in the past week.

Food delivery service DoorDash also issued strong order forecasts in its earnings report, news that helped lift the stock Thursday. CEO Tony Xu dismissed the threat from AI, saying on Wednesday's earnings call that agents and large language models are essentially marketing partners.

"We'll see how much traffic they can drive in a very similar way to how companies like Facebook and Google did the same for DoorDash in the past, " he said. The stock is still down more than 20% so far this year.

Ratings agency Moody's Corp. also issued bullish guidance earlier this week. The stock, along with other financial data providers such as S&P Global and Thomson Reuters, got hit earlier this month due to worries about new features from Claude, Anthropic's large language model. Claude's ability to analyze data and regulatory filings could decrease the need for similar analysis from companies like Moody's. But Moody's stock rose 6.5% Wednesday after the company's earnings report.

Moody's CEO Robert Fauber told analysts in a conference call Wednesday that the company's data is both "AI-enabling and AI-resilient."

"Our data can't be synthesized from public sources," he said. "It reflects how ownership and control actually work in the real world, cutting through complex multilayered structures across jurisdictions and reflecting years of proprietary data curation."

Next up to make their case to investors that they can thrive in the AI age? Giant software companies. Salesforce.com, Intuit, and Workday are all on tap to report their latest earnings next week. All three stocks have been crushed this year: Salesforce is down about 30%, Workday has plunged 35%, and Intuit has tumbled more than 40%.

These and other software stocks could be primed for a rebound if executives hint at more AI upside than downside when they post financial results.

In a report this week, LPL's chief technical strategist, Adam Turnquist, noted that while AI is undoubtedly disruptive, it "won't lead to the extinction of the entire software industry, which is what the market is arguably beginning to price in across many companies in the space."

Software companies are still expected to post strong gains in revenue this year and generate solid free cash flow, he added. That is unlikely to change anytime soon.

Perhaps even more important, big businesses aren't going to just immediately decide to abandon long-term software contracts in favor of AI, he says.

"Many established enterprise software vendors remain deeply embedded within their customers' technology," he writes. "Long--term contracts, combined with costly and time--consuming switching requirements, create meaningful friction against rapid displacement."

Investors will also be watching AI chip giant Nvidia, which is set to announce its latest earnings next week as well.

If Nvidia CEO Jensen Huang continues to be upbeat about AI chip demand, that could boost semiconductor stocks as well as others throughout the tech food chain -- including the hard-hit software and services firms and other companies that have been punished too harshly by AI disruption fears.

Write to Paul R. La Monica at paul.lamonica@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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February 19, 2026 14:09 ET (19:09 GMT)

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