The contemporary software industry is in a bear market, which has been triggered by an acute slump in the S&P North American Technology Software Index. One of the major issues circulates: the possibility that artificial intelligence can replace many of the tools that are currently in existence.
However, Jensen Huang, the chief executive officer of Nvidia, believes that the level of fear is unwarranted and that artificial intelligence will add to and not destroy software businesses.
Such a vision creates a progressively optimistic future of higher-quality companies that already consider AI to enhance their offer and business model.
The reason why Shopify remains appealing
Shopify provides a collection of tools that allow businesses to manage online and brick-and-mortar retailing processes in the same interface. The company is also actively implementing the AI concept into its platform; it has partnered with Alphabet to enable merchants to integrate product information with the help of AI-based search tools.
This means that the customers are exposed to products with increased ease, and the firm has recorded a strong increase in orders generated through artificial intelligence. Recently, industry research group Gartner called Shopify a digital commerce leader.
Although the stock is not cheap, analysts think that the future growth of profit might be supported by the improvement of efficiency and AI tools. The Wall Street Journal reports that the average analyst target indicates significant gains for the shares.
The AI advantage of AppLovin in advertising
AppLovin focuses on the advertising technology that is based on its own AI system, Axon. Axon is described by the investment bank Morgan Stanley as one of the strongest tools in the market in terms of advertising targeting.
The platform provided by AppLovin generates greater returns to advertisers as compared to other main competitors like Meta Platforms, TikTok, Pinterest, Snap, and YouTube.
An opportunity of patient investor
Shopify and AppLovin can serve as important examples of how artificial intelligence can strengthen software businesses instead of replacing them.
Therefore, current market pessimism can give long-term investors a rare chance to purchase high- quality AI-powered companies at a correspondingly lower valuation.