Deutsche Bank says AI fears have peaked; upgrades software stocks

Deutsche Bank strategists said AI fears have peaked and upgraded software stocks to overweight while raising their tech sector rating to neutral from underweight. Maximilian Uleer, Carolin Raab, and Francesca Mazzali argued investors are undervaluing top software names and wrote, "Software companies are trading at historically low premiums versus the market." They added, "Facts are telling a different story." The iShares Expanded Tech-Software Sector ETF has fallen 20% since the start of 2026, while the larger tech sector has dipped nearly 4%.

Intuit, Salesforce, ServiceNow, and Adobe were among the hardest hit, and some of these names have appeared on stock-pick lists at Jefferies, JPMorgan, Morningstar, and Wedbush. Deutsche Bank said it did not know of a single software company that expects AI to have a negative effect on revenue this year.

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