Worries over how synthetic intelligence could disrupt software program corporations have shaken up these shares, and Citi says a few of them could also be ripe for a rebound. Software program shares have struggled this 12 months as traders worry AI will make “software program as a service” enterprise fashions out of date. The iShares Expanded Tech-Software program Sector ETF (IGV) is down greater than 20% for 2026, and has fallen greater than 8% in February alone. The software program sell-off intensified in early February after AI startup Anthropic launched new instruments inside its Claude Cowork agent for authorized, finance and product advertising issues. After a slight restoration, the shares once more fell after AI disruption fears unfold to different sectors all through the market, together with workplace actual property and wealth administration shares . Citi sees alternative amid the carnage, although. In a Feb. 9 notice, strategists screened the Russell 3000 for software program and companies shares with at the least $2 billion in market cap. The names needed to be down at the least 10% over the previous month and have 2025, 2026 and 2027 consensus EPS estimates which were revised greater over the previous six months. “We wish to concentrate on names which have corrected, lowering implicit terminal multiples, however have really seen earnings expectations enhance,” wrote Citi’s U.S. fairness strategist Drew Pettit. “Mainly, who can nonetheless ship near-term basically, however has been de-risked from an exit a number of perspective medium-term.” Due to this, Pettit writes that these shares are set to go greater, not primarily based on technical assist ranges, however the fundamentals of their companies. On the listing is Microsoft , the worst performing “Magnificent Seven” inventory in 2026. Nevertheless, analysts on Wall Avenue are skeptical of its decline. Not solely is it on Citi’s listing, however Goldman Sachs and Wedbush have named the inventory as one to purchase amid the bearish setting. Palantir additionally made the listing. The inventory is off almost 37% from its 52-week-high, regardless of delivering an earnings report earlier this month that beat Wall Avenue expectations. The protection tech firm additionally gave rosy steerage for full-year income. As investor panic subsides, these software program names ought to get curiosity from merchants, in keeping with Pettit. “A elementary focus in a completely valued and extra risky bull market ought to be on earnings momentum for progress areas of the market like software program,” he wrote. “Nevertheless, that has not been a driver of differentiation within the newest leg of software program weak spot. We consider constructive revisions for software program shares might be an necessary elementary catalyst to drive traders again to names which have corrected with the broader business group.”