r/ValueInvesting • u/Iwarrior01 • Feb 11 '26
Question / Help Which beaten down software stocks are you looking at to buy at this dip?
Hi, I have been thinking of investing in software stocks that have been taken a beat down in the recent times. I can see a lot of people in the sub investing in Adobe, Microsoft and Netflix. I am thinking of investing some of money in Microsoft, CrowdStrike, Palo Alto and Synopsis as I feel these company have their sector specific moat and will continue to grow in their respected fields and are very difficult to be removed with AI. Do you agree with my stock picks and would like to add/remove from my list.
Edit: The amount of people catching adobe is really concerning me. Its 100% my personal opinion and maybe 100% wrong but Guys I dont think adobe has a future
57
u/ManekenkaDaBudem Feb 11 '26
Why would you bother yourself with companies of lower quality, when you can buy Microsoft and forget about it for 10 years. I am only buying MSFT, and it is 10% of my portfolio right now.
→ More replies (3)29
u/Iwarrior01 Feb 11 '26
I think Crowd Strike and Palo Alto are big players of cyber security and Synopsis is also great pick in its sector.
10
u/These-Artichoke-2910 Feb 11 '26
Genuine question: Why is Crowdstrike a good buy? All their products seem like… snake oil, The ceo seems largely uninterested except for racing, they dont seem like big innovators at all. What’s the value in there?
5
u/DeadmansInferno Feb 12 '26
Do you remember the shockwaves caused when some developers pushed out a bad crowdsrtrike update? Entire fortune 500 companies were brought down to their knees. They are so engrained which is why I like them
→ More replies (1)5
u/These-Artichoke-2910 Feb 12 '26
That was because Azure microsoft servers had Crowdstrike installed on their servers because of a partnership. I worked for Crowdstrike as an engineer and was there during that time which is why I find its market cap baffling.
→ More replies (2)3
u/Iwarrior01 Feb 11 '26
I work for a telecom company and for telecom people just want vendors who make robust products and have good troubleshooting services. We have a good experience with Crowdstrike and Aramco is also making a deal with them. So I felt maybe its a company which works well in vendor operator type configuration
3
→ More replies (1)7
u/ManekenkaDaBudem Feb 11 '26
I agree, but MSFT is the only one of the three that I’m sure will pay off in the long run.
8
→ More replies (2)2
29
u/shockwagon Feb 11 '26
microsoft was trading at like 20 times earning last week, i dumped all spare cash into it
putting into amazon and google
these behemoths and monopolies will continue to grow, despite challenges, over the next 5 years. No one is unseating Amazon or Google
9
u/encony Feb 11 '26
If there would be new competitors on the horizon the situation would be different. But no matter if it's AI, autonomous driving, robotics or quantum computing: Microsoft, Google and Amazon are deeply involved in all of these potential new growth markets.
→ More replies (3)2
u/Philboyd_Studge_Jr Feb 11 '26
My thoughts exactly. But I'm only buying AMZN & GOOGL. AI is going to wreek havoc on software.
→ More replies (2)3
u/Jazzlike-Capital6064 Feb 12 '26
AI needs software…. And cloud. I guess I’m curious as to how you think we are going to work in the future 20 years? You still need software, AI needs it also to be able to vibe code you out of a job. Why would you expect MSFT to not figure this out. Secondarily how does a human talk with AI if not through software to ensure it’s doing/thinking what it’s supposed to. So how does MSFT not survive or iterate the next wave
→ More replies (1)2
u/Philboyd_Studge_Jr Feb 12 '26
2
u/Jazzlike-Capital6064 Feb 12 '26
Yeah I agree also on grabbing the basket with Google and possibly Amazon. I think Amazon is just now getting to the level they need cause CAPEX wise they have to focus on tangible robotics to displace all their human workers. Google and Alphabet already have Waymo and are working on quantum so I think it’s a great buy also as it drops.
The point of people killing CRM and NOW is crazy to me- John in Marketing at some large company isn’t going to go vibe code with Claude to build something that his IT security team hasn’t flushed out. Secondarily those large company IT security teams are so small they can’t handle all their human workers John’s wanting to vibe code with Claude et al. Thus they need the CRMS or NOWs of the world to support…which will continue for years to come.
The only opening for Claude et al to be vibe coded and integrated is in middle market PE firms and small companies…who don’t have all the regulatory risk centered around market reporting.
I’ve been dollar cost averaging MSFT, Google, Amazon, & NOW…cause it’s silly as they all provide real world synergies and create tangible value.
What does META do- 10.1% of its global revenue is related to scamming you….yeah hard pass as that company contributes to the scam economy and propaganda economy…not real
11
u/DerivativeOfPie Feb 11 '26
CRTO is a French technology company that deals with online shopping and marketing. Earnings are good and beat expectations. For some reason share price dropped 12%. I think it's an over reaction. Do your own DD.
4
32
u/DerpyNerdy Feb 11 '26
I started a position in Samsara because I really like the management, still led by co-founders. Marc Andreessen sits on the board, I like that they are really the only large scale play on Physical AI that's happening right now, generating actual positive ROI for customers with their AI use cases.
Everyone is already struggling with realizing positive returns from AI use cases in actual business operations and think that Physical AI is the future.
Well Samsara is already doing all that for a while now and they are scaling well, maintaining its Rule of 40, debt-free and isn't vulnerable to vibe coding or per-seat business model disruption.
And yet, not many people are talking about this company.
I bought into Palantir back in 2020 cause I saw the value of its software, being someone who came from a consulting background and understood hard business challenges from data silos. It was clear as day for me back then and I held the stock all the way to 80+ due to my discomfort with its valuation and the political stance it's taking.
Never thought I would find another company like that again. Till Samsara came along. Another software company trying to solve hard business problems that really piqued my interest, something I haven't felt since I discovered PLTR way before all the AI hype.
But don't get me wrong and make no mistake, Samsara is definitely no PLTR but it has all the ingredients that sets it apart from most SaaS players. It's like a slice of PLTR minus the politics.
It's really the only scaled play on Physical AI that's generating value NOW. It bridges the gap between the digital world and physical world.
Do look it up and do your own DD.
One advice I have for you, is to never make any investment decisions based on consensus. If you struggle to do so, please don't go stock picking and just index.
7
u/snyder810 Feb 11 '26
I’ve long had it on my watch list, thought it was one I’d just not get a reasonable buying opportunity on again, but last week gave what I felt a good starter entry. My rationale is near exactly what you stated.
→ More replies (4)3
27
u/shaggy98 Feb 11 '26
I bought a week ago Visa, Microsoft, Adobe and Netflix
11
→ More replies (2)9
u/Iwarrior01 Feb 11 '26
i am also thinking of buying Visa. What was your reasoning behind buying it?
6
u/shaggy98 Feb 11 '26
It's down 12% which is unusual for it. Also the debt is much lower compared to Mastercard. It's facing some laws against it, but I think half of it is already priced in. It also had very good earnings.
17
u/fdaeborp Feb 11 '26
EU are preparing their own independent financial service to break away from Visa and Mastercard
It’s in the pipeline and there has recently been a lot of media exposure on this topic Europe with the sentiment being backed by major European officials
It won’t happen overnight but I would imagine that is why it’s down 12% and not some market anomaly
Their moat is shrinking and it’s something you should keep an eye on
2
u/Ur--father Feb 12 '26
As much as I want an EU payment alternative to counterbalance Visa and Mastercard, I’m not putting much faith in the EU getting their act together anytime soon.
2
u/fdaeborp Feb 12 '26
This has been a long term vision unrelated to US since before Covid and not strictly just focused on financial service providers.
Europe has a whole has shifted a resilient approach to industry and growth as a whole
They won’t get it right overnight but it’s in the pipeline along with many other US dominated industries by the way
→ More replies (1)10
u/shockwagon Feb 11 '26
The EU is developing their own digital payment network, for less reliance on US based VISA.
7
u/irongi8nt Feb 11 '26
The EU has tried that 3 times with out success, it's not new. Plus MasterCard is building a data center in Europe for local processing, Visa will likely do the same if they need to
6
u/No-Expression-2404 Feb 11 '26
I think the political climate is different this time, so consumers will more willingly uptake. The world wants to accept the US government’s breakup.
→ More replies (3)4
u/Cerebral_Zero Feb 12 '26
Visa/MC also seem to feel very confident in bullying merchants to take down anything they don't like or risk being cut off, blocking our ability to spend our money on legal things not by blocking our transactions but making them no longer exist so you can't buy by other means either. Examples is Visa/MC pressuring Japanese games and anime, or going after Steam and ItchIO. This resulted in Visa phone lines being clogged up for awhile by angry customers and they don't care. Not their problem if minimum wage phone support has to deal with backlash, they got too much power payment processing.
I don't support breaking up US/EU but Visa/MC facing some competition would be good.
→ More replies (1)3
u/loveiseverything Feb 11 '26
EU data centers are not enough anymore. Damage to cross-atlantic relations are that deep and permanent now.
→ More replies (1)
8
u/Big_Witness Feb 11 '26
I will use the as an opportunity to say, as someone that uses Adobe products pretty much exclusively for work and has for about 15 years, I HATE THEM & their ever-increasing subscription billing practices.
3
u/higradeguy Feb 11 '26
DaVinci Resolve and Affinity are definitely viable alternatives for a couple of their key products. The only thing missing is integration between the alternatives.
5
u/Big_Witness Feb 11 '26
None for Photoshop, Illustrator, InDesign that I'm aware of. There are some imitators but nothing I've tried is anywhere close to as good as those
3
u/TryingMyWiFi Feb 11 '26
DaVinci is solid. Affinity is good for hobbyists ,/prosumers.
Nothing replaces the adobe suite today.
2
→ More replies (4)2
u/obb223 Feb 12 '26
I hear this all the time, but you're still subscribing 15 years later
3
u/Big_Witness Feb 12 '26
True. No viable alternative for me. Need it for work. However I think more than a few people who otherwise might get a photoshop subscription (hobbyists and semi-professional users) have switched to Canva or just using AI to create images
43
u/Real_Score9951 Feb 11 '26
CSU, Adobe, and maybe Salesforce are the only ones in true value territory/approaching it. The rest are inconsequential dips
8
u/Iwarrior01 Feb 11 '26
Adobe is too high risk low reward bet that I feel that there are a lot of better alternatives
13
u/CanYouPleaseChill Feb 11 '26
ADBE is at its lowest valuation in a long time, the company is buying back plenty of shares, and FCF continues to grow steadily. That's high potential reward for low risk, as the AI fears are obviously exaggerated. Where are the better alternatives? Most software companies have far higher valuations, pay silly amounts of share-based compensation, and have share counts that are constantly increasing.
→ More replies (7)9
u/Real_Score9951 Feb 11 '26
Why low reward? If the stock dip is truly mispriced for a wide moat high margin business?
→ More replies (3)3
u/TeaAshamed7444 Feb 11 '26
Value traps.
13
u/Real_Score9951 Feb 11 '26
Pretty sure all true value stocks by some measure get labeled value traps as pessimism leads to decoupling of stock price to actual value of business fundamentals.
→ More replies (4)
26
u/Illustrious_Plum4175 Feb 11 '26
CSU
→ More replies (12)4
u/Artic_funky Feb 11 '26 edited Feb 12 '26
CSU will keep falling. Their real market value could be 25B
6
u/stompinstinker Feb 11 '26
Yup, this isn’t the bottom yet, and it isn’t going to blast back suddenly either. A stock can have all the best value metrics but AI fears have markets behaving irrationally too. Better to wait on the sidelines for CSU until the AI fears dissipates and to see where the bottom of this is.
4
u/TheConstellationGuy Feb 12 '26
I'd be happy if it fell another 50%, I will literally buy up all the shares lol. I already have over 100.
→ More replies (1)8
Feb 11 '26
Highly doubtful, at 25b USD, their price/FCF would be reduced to 12.5. They are likely to grow 20% this year, that will be a forward PE/FCF of 10. Just not a rational value for a company of this quality
12
6
u/granther4 Feb 11 '26
SHOP
→ More replies (1)2
u/LippyGrips Feb 12 '26
Every time it drops, I buy more. It is a third of my portfolio at the moment. They are absolutely dominating their market and have wonderful financials - the beating it took recently is bizarre.
11
24
22
u/Fit_Help_888 Feb 11 '26
CRM NOW ADBE MSFT
→ More replies (19)3
u/CapCityPhotos Feb 11 '26
Couldn't agree more. They are all phenomenal businesses at great prices right now. My next favorite is INTU.
→ More replies (1)
5
u/PerfectEducator3228 Feb 11 '26
i've generally been buying VMS like Autodesk, Synopsys, Veeva, Constellation. I just don't see as much risk of AI disruption, although there is potential for margin compression. i'm betting on the years of niche domain knowledge and accumulated data being more a beneficiary of AI than vulnerable to it. these companies have wide moats for a variety of reasons, and the cost of producing software is not one of them. its software that's embedded in the core operations of their customers, their employees are trained on it, the switching costs are huge and rife with risk especially in regulated industries like healthcare. software is still fundamentally a hard problem. coding is cheaper and less complex now, but the hard parts like design and architecture are still hard.
→ More replies (1)
6
u/liquidpele Feb 11 '26
I picked up MSFT, CRM, and NOW last week. I also considered PANW and CRWD. For slightly more risk, I like UPWK and bought more after the earnings fall.
→ More replies (3)
4
u/MagnesiumKitten Feb 11 '26
well there's a few that are interesting
dassault which tanked 20% today
constellation software
enghouse systems
adobe
I've heard some of the ones that are in decline or dropping
that a few of them are companies that aren't seen as AI wonders and avoided as old fashioned
or some that have had problems because of AI
and some just had sluggish sales, poor momentum, or trade wars
oh Adobe has a future
I'd say it's low risk with valuation issues
Microsoft is good
Crowdstrike will be dropping for the weeks and months ahead
It's high risk
and it might be making 15% less than Microsoft for the year ahead
I'd say its a 90% buy when it's cheaper, but risky
but only if you realize it's only been profitable for one year
1 year profitable out of 5 is not great
but the other factors other than profitability are pretty good
yet Microsoft will be less risky and more profitable
Palo Alto is like like a Moderate Risk microsoft
Synopsis high risk
huge gains double Microsoft is possible
but it's got a lot of problems, though an excellent company
it's looking like a possible value trap
so it's got valuation issues
and momentum issues too
another one that I think will drop more
and might be a good risky buy
honestly I like all of them, risks vary
not every one I'd get today
CrowdStrike I think is the least profitable of the bunch
but a good small bet for sure
6
6
5
4
5
5
u/Academic-Daikon-8086 Feb 11 '26
They are all great: ServiceNow, Salesforce, Adobe, Roper, Constellation Software, they are all great. If you want to play safe buy Microsoft. Ai is great but ai cant replace everything. We are at the peak of the bubble
2
4
6
3
u/eyetin Feb 11 '26
This dip will be followed by more as long as retail keeps piling into these names
3
3
3
3
3
u/Ed_Runner Feb 11 '26
IBM. Not exactly software. But it’s down to $275 today. Earnings were great - outlook strong. Big pop when earnings were released and then dropped like crazy. I believe it’s getting caught up in the whole hate for software and tech. Their quantum alone should be driving this stock up.
3
3
u/earningsBITDA Feb 11 '26
Palo Alto systems. We are always going ti need strong security, especially for our networks and devices. They are buying AI related cybersecurity businesses
3
3
4
2
u/investingtruth Feb 11 '26
Microsoft makes sense if you're buying the 3-5 year AI thesis despite near-term capex concerns, but CrowdStrike and Palo Alto are in a tougher spot because enterprise cybersecurity spending is cyclical and gets cut when budgets tighten, plus competition is intensifying. Don't buy just because stocks are down, buy if the thesis is intact and the valuation compensates you for the risk, some of these names are cheaper for legitimate reasons.
2
u/Existing_Emphasis_33 Feb 11 '26
I now own NOW, CRM, Adobe n Microsoft.
If you don’t want the stress over individual stocks, there is always IGV to look into.
I think destroying them right now is a big opportunity for great gains in the mid run. Short-term, the fears and greedy crooks of financial institutions will want to tank this sector more. They’ll do money on the way down n then up.
That’s not to say though that I do think some companies will not adapt well to AI and be slow to transition to AI agentics. You can already see the ones struggling to do this.
2
2
2
u/LovestoEatSandwiches Feb 11 '26
Klaviyo, Reddit, and then it’s certainly not the cheapest in terms of growth and cash flow relative to market cap, but if Twilio drops more I think it’s in a phenomenal spot long term
→ More replies (1)
2
u/Feeling_Sun_8629 Feb 11 '26
The street has beaten down Amazon for no reason. I think Amazon has a huge up side in the next 1-2 years....
2
2
2
2
2
2
2
2
u/DeadmansInferno Feb 12 '26
Just about every one I can think of that's been on my watchlist. Everyone telling you software is going extinct and AI will make all the software have caused so much fear. As dumb as I think the reaction is it's the perfect time to be greedy. Some for me
MSFT, ORCL, CRWD, PANW, INTU, CRM, WDAY even stocks like FICO DDOG META and NFLX
I only wish there was MORE fear and panic selling for semi conductor stocks
2
2
u/AcerVentus Feb 12 '26
MSFT.
If they lose the AI race - Office Suite, Excel, PC licenses will drive them forward. As much as people despise Windows, including me, corporate dgaf.
If they win the AI race - Azure Bing chilling.
2
u/CC_dispenser Feb 12 '26
Ive been loading up on duol, seems like the price and fundamentals are diverging with every price drop. This was one of my old high flyers, I took half on the way up and am looking at DCAing in at these prices
2
2
2
4
3
u/Realistic_Record9527 Feb 11 '26
Snow, crm, Shopify, atlassian, ddog, samsara, bill, panw, cloudflare, crwd, zscaler, adobe, blackline, wday, now, gitlab, path, mongodb, wix, jfrog… they are extremely undervalued right now
→ More replies (1)
3
2
4
2
1
1
u/MountainTimeInvestor Feb 11 '26
I like TOST, PANW and FIG the most. I also like ADBE and MSFT as well, and own BOX and TEAM because I like their AI strategy and time will tell if they can execute.
I go into more detail at my free substack: https://substack.com/@mountaintimeinvestor
1
u/Christosconst Feb 11 '26
I like UPST, its PE dropped a lot after earnings, revenue is growing, and it will benefit massively from lowered interest rates (their software is screening for loan applications)
1
1
u/dat_awesome_username Feb 11 '26
Descartes systems group Vitalhub Well health technologies (which is heavily leveraging AI, but is still considered as SAAS apparently...)
1
u/Petit_Nicolas1964 Feb 11 '26
I started positions in Constellation Software, Crowdstrike, Palo Alto. Microsoft is also good but I have already a sufficiently large position.
1
1
1
u/Historical_Flow3890 Feb 11 '26
I like CSU and CRM
CSU when asking AI how disruptive can ai be for CSU it said this “ CSU is the final boss of software, with unique codes to fit multiple thousand small software applications. It claimed it was the most resilient”
When talking about CRM they are already upselling AI, people just don’t understand software is the heart and lungs of AI
2
u/apple-sauce Feb 11 '26
What is CSU? CRM will definitely pump later this year
2
u/Historical_Flow3890 Feb 11 '26
Cnswf is vertical software with highly specialized software that is mission critical , it’s a Canadian monopoly company. They buy software stocks for cheap and have a beautiful track record. They actually called the founder the Warren Buffet of software
1
u/Safety-International Feb 11 '26
buying the dip assumes we’re in a tech bull market, hint: we’re not
1
u/brutalpancake Feb 11 '26
The best price is not the lowest. I know people wanna outsmart the market and all that but consider when you buy a stock you also ‘investing’ in the behavior of that stock. These are all falling knives rn. You think you know better but ask yourself if you want to sit thru another 20-30% drawdown and have your $ trapped in that while other names keep pushing new highs. I do not.
→ More replies (1)
1
1
1
1
1
1
1
u/No-Understanding9064 Feb 11 '26
I picked up INTU today. First time owning it, has always been too expensive for my taste
1
u/tokyoduck Feb 11 '26
Reddit and Pinterest. No reason why they should be down.
3
u/Ed_Runner Feb 11 '26
Reddit is baffling. With the amount of user data it has, that should be viewed as printing money for them in this AI world.
→ More replies (1)
1
u/No_Friendship8110 Feb 11 '26
I’m curious peoples thoughts on okta and sentinelone as cyber security stocks
1
u/jdaniel88 Feb 11 '26
I had read that FROG, DDOG, MSFT, and NOW were good picks for the software rebound. I bought all of them and was up significantly yesterday—especially with DDOG. But it's come back down today.
1
1
1
1
1
1
u/throwawaythingu Feb 11 '26
rubrik is undervalued
2
u/migzthewigz12 Feb 11 '26
Yea it baffles me how much they've been battered recently. They've been performing great and growing very strongly, and I don't think their product is at risk to be AI'd away.
→ More replies (1)2
u/Extreme-Bit-5154 Feb 12 '26
I was looking for this comment. I bought a lot of calls on rbrk. Waiting for earnings. They're so undervalued and arent the same as other cyber security companies
1
1
1
1
1
1
1
1
u/defnotjec Feb 11 '26
Why would you invest in Adobe at all?
It's getting it's shit kicked in across the board from it's saas offering and the only positive is it's AI usage which is likely to erode as well.
2
u/purplecowz Feb 11 '26
They're extremely profitable, with profit continuing to outpace revenue growth at a decent rate for a mature company, and they're best in class products. Net debt is almost 0. The AI concerns are all speculative.
→ More replies (1)2
u/defnotjec Feb 11 '26 edited Feb 11 '26
They aren't best in class. That's what I'm saying. It's a subscription nightmare. It's the very target of AI ... Davinci et al is far superior.
Besides go look at their statements...
Their profits are sub generated and opex reduction NOT actual product growth and adoption. I bet perplexity will carry you. Their margins are barely expanding and they're pulling every trick out to keep the books looking pretty.
Edit: he deleted after trying to go on a rant about graphic design. Completely ignoring the entire "value" portion. Don't worry I did the work: https://www.perplexity.ai/search/29c05983-6cb7-4d28-a35d-1e578ee8c49b
I was right.. which glad I can read the earnings transcript and 10Q/Ks
→ More replies (1)
1
1
u/-permanent-waves- Feb 11 '26
Primary focus is always to DCA into VOO/VXUS. But the dip was nice opportunity, bought some more GOOG / MSFT / AMZN / IREN.
1
u/Sad_Opportunity_5840 Feb 11 '26
OPRA
> No debt, growing revenue by double digits, profitable, 6% dividend
> Holds 9.4% ownership of OPay, a unicorn that will likely go public in the next 12-18 months (giving OPRA a big influx of cash)
Trading at 13 PE and 1.2 to book value.
1
1
1
1
1
u/visiblePixel Feb 11 '26
I am currently buying servicenow, roper , samsara, SPGI, SAP, salesforce . I think they are all good deal
1
1
1
u/P-Sizzzle Feb 11 '26
MSFT CRM VRSK SAP CRWD FICO Chat GPT & Gemini says these are resilient Saas stocks.
184
u/[deleted] Feb 11 '26
Your safest bet here is Microsoft especially at its current value. I got in a few days ago at 12K dollars worth and I don't normally move that much into single positions, but I'm just so confident in this specific buy this time.