Report · 2026-03-02 · 94d

AI Will Expand Rather Than Destroy Software Industry Competitive Advantages

Despite a 30% decline in software ETFs since early 2026 amid AI disruption fears, the authors argue that AI will actually strengthen rather than destroy the software industry. The durable competitive moats that built great software companies—network effects, brand, switching costs, and scale—will persist and may even be amplified in an AI-native world.

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Metrics in this report

Individual Stock Declines

25-30%

range

Salesforce, Adobe, Intuit, ServiceNow, Veeva over weeks in 2026

Software ETF Decline

30%

since start of 2026

public software companies