JPMorgan: Market Concerns Over AI Are Overblown, Now Is the Best Time to Buy Quality Software Companies

Glonghui, February 27｜As the "artificial intelligence (AI) panic trade" continues to ferment, U.S. software stocks have performed poorly in recent weeks. Since the beginning of 2026, the sector's market value has evaporated by about $2 trillion, dragging down the share prices of many tech giants. The software industry's weighting in the S&P 500 Index has dropped from 12% to 8.4%, and the relative strength index of the S&P 500 Software & Services Index recently fell to 18, a level not seen since the end of the dot-com bubble. In response, JPMorgan stated that the market is overreacting: "Today, investors willing to look past the noise may be facing one of the best entry opportunities for high-quality software companies in recent years." JPMorgan analysts pointed out in their latest report that the market is pricing in a disaster that will not occur for several years. JPMorgan believes that a complete replacement of enterprise software by artificial intelligence will not happen until after 2028 at the earliest. Current tools only assist workflows rather than replace them. While such concerns are not unfounded, the timeline set by investors is unrealistic.