Investors eye battered software stocks like Cadence and Palo Alto as AI reshapes the industry landscape.

The rise of AI is challenging traditional software companies, creating uncertainty but also opportunities for value investors. Not all SaaS firms will succeed in adapting, but companies with strong data moats, AI expertise, and solid management may thrive. Cadence Design Systems and Palo Alto Networks stand out as resilient players benefiting from AI-driven demand in electronic design automation and cybersecurity. These firms are positioned to grow as AI technologies advance, offering potential bargains amid a volatile market. Investors should research carefully before investing in this evolving sector.