3 Under-the-Radar Software Stocks Ready to Bounce

Is the software downtrend finally nearing the bottom? It might be too soon to tell for the industry as a whole, but the selloff is starting to peter out, and several beaten-down stocks are attempting to rally. Today, we’ll look at three software stocks with the potential to lead the rebound in 2026.

February Factors Sparking a Meaningful Turnaround

The software slump was a widespread phenomenon, with the iShares Expanded Tech-Software Sector ETF (BATS: IGV) dropping more than 30% from its previous all-time high in September. The selloff was so profound that the fund’s Relative Strength Index (RSI) reading dipped below 20 to reach its most oversold level in nearly 30 years.

The catalyst for the implosion came with a wave of Q4 2025 earnings calls, when enterprise software companies began regularly mentioning the threat of AI agents. The headwinds came full force when Anthropic released a series of plugins for its Claude Cowork on Jan. 30, and the selling in the software sector turned indiscriminate.

The bear case for software at the moment is simple: if an AI agent can do the work of a dozen sales reps, clients won’t need to shell out capital for hundreds of software licenses. For companies providing SaaS solutions in project management, accounting, and customer relationship management (CRM), this becomes an existential problem that can reduce sales by upwards of 90%. 

More than $2 trillion was wiped out of the sector during the selloff, including $285 million from IGV in a single session on Feb. 3. However, software began mounting a defensive stand last month, led by several surprising sources.

• Anthropic’s virtual event on Feb. 24 announced new partnerships with Slack, Thomson Reuters, FactSet, and more. Instead of driving another nail into software’s coffin, Anthropic struck a more symbiotic tone, and many software stocks rallied following the event.
• NVIDIA Corp (NASDAQ: NVDA) CEO Jensen Huang pushed back against the software death knell narrative in a televised interview. According to Huang, AI won’t cannibalize software but work in tandem with established platforms to deploy unique agents and augment their specific networks. 
• The software selloff has created an opportunity in a technical sense, as ETFs like IGV are reaching oversold levels not seen in multiple decades. If massive disruption does occur in the software industry, the true effects likely won’t be felt for several more years yet, creating at least a short-term buying opportunity for downtrodden software stocks.

3 Software Stocks Showing Signs of a Reversal

It's still too early to call a bottom in software stocks, especially given that the broader tech sector is still facing valuation and CapEx concerns. However, these three companies are already showing positive fundamental and technical signals, and could be amongst the first stocks in the industry to rally off their lows.

HubSpot: Compelling AI Position with Momentum

HubSpot Inc. (NYSE: HUBS) is among the biggest losers in the software meltdown, with shares down more than 70% from their previous all-time high. But now that the stock is trading at a compressed multiple, investors are starting to notice the value proposition.

The company reported more than 20% year-over-year (YOY) revenue growth in its Q4 2025 earnings numbers, with full-year revenue of $3.13 billion (also up 20% YOY). Fiscal year 2026 also looks promising, with revenue guidance of $3.7 billion and operating margins of 20%. Additionally, HubSpot’s AI suite includes Customer Agent and Prospecting Agent platforms, which actually position it to be a beneficiary of AI disruption, not a victim.

The technical patterns also point to a momentum reversal. The stock price has formed a double bottom pattern around the $215 mark, with a bullish Moving Average Convergence Divergence (MACD) crossover signaling a shift from bearish to bullish momentum. The Relative Strength Index (RSI) has also been pulled out of the oversold range for the first time since January.

ServiceNow: The Risk/Reward Pattern Has Shifted

ServiceNow Inc. (NYSE: NOW) is actually one of the companies that Jensen Huang mentioned by name during his CNBC interview. AI disruption isn’t limiting ServiceNow’s growth prospects; it's enhancing them thanks to products like Autonomous Workforce and EmployeeWorks, which help coordinate workflows with specialized AI agents.

If disruption were coming to ServiceNow, it would likely show up in subscription revenue, but that’s clearly not happening yet, as the company delivered 21% subscription growth in Q4 2025 with a 98% renewal rate. Management also signaled confidence by announcing a new $5 billion share repurchase agreement.

NOW shares finally broke out of a multi-month downtrend last week, getting a momentum boost from a bullish cross on the MACD. The RSI has also broken out of Oversold territory, and with shares now trading at 12 times forward earnings, the stock is attractive from both technical and fundamental perspectives.

CommVault Systems: Resilient Revenue Leader Caught in the Crossfire

CommVault Systems Inc. (NASDAQ: CVLT) is a consistent earnings and revenue accelerator that appears to have been caught unfairly in the software stock unwind. The stock is down more than 50% from its highs despite crushing earnings, posting record quarterly revenue of $313 million. Full fiscal year 2026 subscription guidance projections came in above expectations, at $764 million to $768 million, representing 30% YOY growth.

The stock dropped more than 30% in the session following the results, a move that seems to have put the market offside, especially given that the stock was upgraded from Hold to Strong Buy by Zacks Research after the report.

Much like HUBS shares, the stock is getting bullish technical tailwinds from the RSI and MACD. The same double-bottom pattern has formed, hinting that buyers are becoming more aggressive beneath the surface, and a new wave of upward momentum could be on the horizon.

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