Goldman Sachs: Software Stocks Realize AI Dividends

Goldman Sachs TMT trading expert Peter Callahan pointed out that the AI narrative in the software sector has changed after the earnings season. The market was once concerned that generative AI would weaken the moats of traditional software companies, but the fields of data infrastructure and development tools have begun to shift from "AI headwinds" to "AI tailwinds," with companies like Cloudflare, Palantir, Datadog, Twilio, and Atlassian receiving more attention. In contrast, it remains to be seen whether traditional SaaS application companies can establish a clear logic for benefiting from AI. The commercialization of AI is beginning to extend from model training to inference, agents, and automation applications. Cloudflare disclosed that non-human traffic has surpassed human traffic, and machine-generated web requests are expected to grow rapidly. This indicates that AI is not only a substitute for software companies but also a platform that carries data, APIs, web traffic, security, and development tools. The increase in the number of agents and their call frequency may become a new source of demand. As a result, there is a clear differentiation in the software industry, and whether AI constitutes a benefit increasingly depends on whether companies are at the application layer or the infrastructure layer, as well as their ability to directly monetize the growth in AI traffic.

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