The software industry is seeing a market rout as investors have started to question whether software firms could weather the disruption brought about by AI.

Since late 2025, the shares of major software companies like Salesforce have dropped steadily.

And last week, investor skepticism on the software industry intensified further upon the release of Anthropic’s Claude Cowork—an AI assistant that some think has the potential to replace SaaS products.

However, even though industry-wide skepticism persists in the software space, this doesn’t mean investors are out of options.

The best stocks today are those enabling the AI boom—and South Korean SK Hynix’s reveals why this is the case.

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Anthropic’s Claude Cowork—an AI assistant that can automate legal, sales, finance workflows—sent software stocks stumbling last week as Wall Street panicked about its potential to replace Software as a Service (“SaaS”) products.

Firms like Salesforce and Intuit saw their stocks drop by over 10% in the wake of Claude Cowork’s announcement and release as a result of investor selloffs.

Wall Street was rattled because Claude Cowork’s new plug-ins have the ability to review legal contracts, perform tasks related to financial analysis, and other industry-specific needs.

These added capabilities are appealing to end-users because they can enable them to create software solutions with just a few prompts—eliminating the need for SaaS solutions which can cost thousands of dollars in licensing fees.

While it remains to be seen whether AI can supplant SaaS solutions and upend the trillion-dollar software industry, this hasn’t stopped investors from panicking and selling off their shares.

Even though the recent sell-offs may appear like a one-off reaction, the shares of software giants like Salesforce, Workday, ServiceNow, Intuit, and Monday have steadily declined since late 2025, and it cannot be denied that AI has played a role.

While skepticism persists in the software industry, this doesn’t mean investors are out of options. The best stocks today are those enabling the AI boom.

For most of the past year, energy has been billed as AI’s greatest bottleneck as AI data centers require gargantuan amounts of energy to power their operations. In fact, it’s estimated that by 2030, data centers could consume as much as 12% of the total electricity generated by the U.S. grid.

This being the case, power isn’t the only bottleneck confronting AI. The industry needs access to a stable supply of high-performance chips too.

Chipmakers have seen their fortunes change in recent years and now play a crucial role in today’s AI revolution.

And one of the most notable examples is South Korean chipmaker SK Hynix.

The company specializes in dynamic random-access memory (“DRAM”), flash memory, and high-bandwidth memory (“HBM”) chips.

HBM chips are highly desired by hyperscalers and AI firms because these are needed for data center operations. In recent years, SK Hynix has become an important partner for AI darling Nvidia (NVDA) because of its lead expertise in manufacturing HBM chips.

This expertise has enabled SK Hynix to beat out South Korean rival Samsung in the HBM market, as it controls 54% of it as of 2025.

Simply said, SK Hynix is one of the biggest players in the semiconductor sector. And recently, the company has benefitted significantly from the rising prices of HBM, DRAM, and flash memory due to high demand and low supply.

The company’s fourth quarter 2025 revenues went up 66% over the past year while operating margins were up 58%. The firm has also seen its revenues rise sharply in recent years due to the AI boom, going from ₩43 trillion in 2021 to ₩97 trillion last year.

And since the end of September last year, the company’s shares are up by more than 150%. WIth AI demand expected to further intensify memory chip shortages, SK Hynix is poised to benefit further.

Investors should keep in mind that some of the best and biggest stocks today are the companies enabling the AI boom, not the firms at risk of being replaced by it. As seen in SK Hynix’s case, companies that are thriving now are the ones who are well-positioned to address AI’s biggest bottlenecks.

Best regards,

Joel Litman & Rob Spivey
Chief Investment Officer &
Director of Research
at Valens Research