What disruption? Deutsche Bank turns bullish on software stocks, saying AI fears have peaked.

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Deutsche Bank has turned bullish on software stocks, upgrading them to overweight and lifting its tech sector rating, as strategists believe fears about AI disrupting the industry have peaked. Despite a recent decline in software stock valuations, the bank points to solid earnings growth, with US software companies’ earnings growing 29% year-over-year in Q4 2025, and no company expecting negative AI impact on revenue this year. The strategists argue that investors are undervaluing software firms and that the positive effects of AI, such as lower programming costs and product improvements, are being overlooked.

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