- Amid AI disruption fears, some software leaders are actually strengthening their moats.
- Snowflake, Reddit, and Workday each possess unique assets that make them essential in the new tech landscape.
- Their current valuations present a compelling opportunity for investors seeking growth and resilience.
While the rapid ascent of artificial intelligence has rattled investors across the software sector, it has also opened the door to buy high‑quality platforms at more reasonable prices. Snowflake, Reddit, and Workday sit squarely in that camp.
Each has faced skepticism about how generative AI might change their business, yet all three are leaning into the shift, building AI into their offerings instead of being undermined by it. Their year‑to‑date performance reflects that push and pull and current analyst price targets generally imply meaningful upside from today’s levels.
1. Snowflake
- YTD Performance: -31.3%
- Market Cap: $52.1 Billion
Snowflake (NYSE:) has faced investor skepticism this year, with its stock performance down nearly 31% year-to-date over concerns about growth deceleration and competitive pressures. However, this selloff overlooks the company’s profound strategic shift and untapped potential. Snowflake is not just a data warehouse; it is becoming the foundational data layer for the enterprise AI ecosystem.
Far from being disrupted, the company is monetizing AI demand through partnerships and native AI features that help customers process data more efficiently, driving consumption growth even as broader software spending moderates.
Source: Investing.com
Analysts remain bullish, with a consensus twelve-month price target hovering near $230, implying nearly 53% upside. Barclays continues to rank Snowflake among the top infrastructure software stocks benefiting from AI, citing resilient fundamentals and the platform’s expanding addressable market in generative AI workloads.
The company’s recent hiring of Sridhar Ramaswamy, a former Google advertising executive and AI expert, as CEO signals a sharpened focus on monetizing data through AI and machine learning applications.
2. Reddit
- YTD Performance: -32%
- Market Cap: $30.1 Billion
Reddit (NYSE:), currently trading near $156 after a 32% year-to-date decline, offers another counterintuitive opportunity in the AI era. The social media company has quietly transformed into a premium data asset for the world’s leading AI developers through lucrative licensing agreements with companies like Google and OpenAI.
These agreements effectively create a new, high-margin revenue stream that the market is still valuing.
Source: Investing.com
Wall Street’s average price target sits around $224, suggesting over 43% potential upside, with some firms like Truist highlighting it as a top pick for 2026 thanks to durable growth in both data licensing and automated ad formats.
As AI companies scramble for quality training data, Reddit’s archives represent a moated asset that cannot be easily replicated. While still speculative, analyst optimism is growing, suggesting confidence that its AI data monetization strategy is just beginning to unfold.
3. Workday
- YTD Performance: -44.7%
- Market Cap: $30.5 Billion
Workday (NASDAQ:), the enterprise HR and finance software leader, has been among the hardest hit by AI disruption headlines, as some feared autonomous agents could erode demand for its core applications. Shares are hovering around $128 after a steep 40%-plus year-to-date drop.
However, the company is flipping the script by embedding “agentic AI” directly into its platform, with this autonomous task-executing technology already surpassing $400 million in annual recurring revenue.
Source: InvestingPro
Analysts project an average price target near $180, while the InvestingPro Fair Value model points to roughly 60% upside from current levels, with many viewing the current weakness as a classic overreaction that ignores Workday’s massive untapped market in cloud ERP penetration.
The company’s co-founder return to the CEO role has further signaled a renewed focus on innovation, while high switching costs in regulated industries like healthcare and federal government ensure long-term customer stickiness.
Bottom Line
Snowflake, Reddit, and Workday are all proof that software’s demise at the hands of AI is greatly exaggerated. With YTD declines that look like capitulation, but with fair value and analyst upside that point to recovery potential, these are names to watch as the AI wave sorts out the true survivors from the rest.
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Disclosure: This is not financial advice. Always conduct your own research.
At the time of writing, I am long on the S&P 500, and the Nasdaq 100 via the SPDR® S&P 500 ETF, and the Invesco QQQ Trust ETF. I am also long on the Technology Select Sector SPDR ETF. I regularly rebalance my portfolio of individual stocks and ETFs based on ongoing risk assessment of both the macroeconomic environment and companies’ financials.
The views discussed in this article are solely the opinion of the author and should not be taken as investment advice.
Follow Jesse Cohen on X/Twitter @JesseCohenInv for more stock market analysis and insight.