AI Bull Market Narrative Enters Act 2! With Token Profit Soaring, Software Sector Welcomes "Counterattack Moment" as these two software stocks take the lead.

AI computing power infrastructure and AI large model-related topics have become decisive investment themes in the global technology industry, attracting a significant amount of funds and helping to drive strong profit growth in the global stock market in recent years. The construction of AI data centers and the rapid iteration of cutting-edge AI technologies on massive data center infrastructure are also changing the dominant forces of multiple bull markets in the software industry since the beginning of the internet era. With the Philadelphia Semiconductor Index plummeting by 7.9% in a single day and experiencing drastic fluctuations exceeding 5% multiple times in the past month, it highlights that the AI computing power industry chain related to semiconductors has entered a phase of high volatility, leverage, crowded long positions, and pressure to realize high expectations. This market structure is somewhat favorable to software stocks that are benefiting from the super wave of AI application and are also adorned with the "AI halo." Undoubtedly, leaders in the AI application industry like Anthropic in the global software industry have sparked strong investor concerns this year with the rise of AI intelligent entities, leading to worries about a potential "SaaS doomsday" as AI intelligent entities start to efficiently take over tasks that were previously completed using specialized applications or SaaS software systems. This concern has prompted Wall Street analysts to mention the so-called "SaaS doomsday theory" multiple times this year. In mid-June, performance data released by the globally renowned IT services and IT outsourcing company Accenture Plc Class A (ACN.US) for the fourth quarter of fiscal year 2026 showed revenue outlook lower than the Wall Street analysts' average expectations. This top-tier global technology consulting company reported an unexpected 2% decline in third-quarter order volume, indicating ongoing uncertainty in the IT consulting and outsourcing sectors, as well as the entire SaaS software industry market under the "AI revolution of everything" led by Anthropic. Following the performance announcement, Accenture Plc Class A stock price plummeted by 18% in a single day. Not only in the US stock market, but IT services, outsourcing, and the broader SaaS software sector in global stock markets have been consistently declining since February due to the panic caused by the "AI revolution of everything" ignited by Anthropic. Although there has been a surge in buybacks in the US software sector, investors remain cautious as the market's main concern lies in whether long-term fundamentals and business models will be completely reshaped by AI. With innovative AI intelligent entities focused on autonomous workflow being introduced one after the other, these entities may overturn one industry after another and suppress pricing power in the broader economy. Concerns about how the "super wave of AI" may compress corporate profits, disrupt employment, and bring about deflationary impact have rapidly extended to multiple traditional economic sectors such as software, private credit, real estate services, and insurance this year. However, in the eyes of Wall Street giant Goldman Sachs Group, Inc., companies that are at the intersection of customer experience, marketing automation, customer data platforms, and AI intelligent entities that can integrate enterprise customer data, real-time behavior, marketing touchpoints, customer service interactions, and purchase conversions into a closed-loop AI application software system are approaching a "strong upward reversal window." According to Goldman Sachs Group, Inc. and other Wall Street analysts, the pessimistic market narrative of "AI eliminating software" is overly linear, and companies that can fully embed AI into their revenue processes, reduce costs, and improve efficiency through subscriptions, usage, conversion rate improvements, and automation efficiencies are likely to undergo a market reevaluation. Enterprises have recently been aggressively pushing forward the widespread application of two core categories of AI software - generative AI applications and AI intelligent entities. Among these, AI intelligent agents that autonomously carry out various tedious and complex tasks are likely to be the ultimate trend in AI applications over the next decade. The emergence of AI intelligent entities signifies the evolution of artificial intelligence from an information support tool to a highly intelligent productivity tool, which is also why Anthropic's valuation has surpassed 1 trillion dollars and surpassed OpenAI. The most recent research by MarketsandMarkets indicates that the AI intelligent entities market size is expected to reach as high as $53 billion by 2030, with a compound annual growth rate (CAGR) of up to 46% starting from 2025. Conditions for a software stock rebound seem to be increasingly ripe, but the main line of the rebound will be highly differentiated. The beneficiaries will not be those reliant on traditional seat fees, shallow processes, weak data barriers, and easily replaceable by AI intelligent entities from the old SaaS camp, but rather platform-based software companies that have customer data, transaction data, marketing touchpoints, customer service context, industry workflows, and AI agent implementation scenarios. The leveraged nature of the AI semiconductor trading theme, along with crowded positions and pressure from rising consumer electronics prices, will shift capital from "buying scarce computing power" to "seeking AI commercialized cash flows." Companies like Klaviyo and Braze, if they can demonstrate that AI products improve retention rates, conversion rates, average order values, and operational profit margins, could become examples of software rebound after a steep decline this year. However, this is not a low-risk, across-the-board rally market; the market will continue to punish star software companies with slowing growth, blurred AI moats, and deteriorating unit economic models. The AI bull market narrative is shifting from "buying shovels" to "using shovels"? AI application software stocks or strong counterattacks may come as the AI computing power industry chain becomes increasingly crowded; Klaviyo and Braze may become examples of "anti-SaaS doomsday" and a major software stock rebound. It is worth noting that since June this year, as hot semiconductor stocks related to AI GPU/AI ASIC, CPUs, storage, optical interconnects, and other hot semiconductor stocks closely associated with AI computing power infrastructure have become the most crowded long trades globally and volatility has intensified, senior analyst Gabriela Borges from Goldman Sachs Group, Inc. sees an important potential logic for the recovery of software stocks. This Wall Street analyst believes that as AI reshapes the global software industry and creates new opportunities, some software companies stand to benefit significantly. Specifically, this analyst believes that software companies focusing on the intersection of customer experience, marketing automation, customer data platforms, and AI agents that can aggregate enterprise customer data, real-time behavior, marketing touchpoints, customer service interactions, and purchase conversions into a closed-loop AI application software are approaching a "strong upward reversal window." According to analysts at Goldman Sachs Group, Inc. and other Wall Street firms, the pessimistic market narrative of "AI killing software" is overly linear, and companies that can fully integrate AI into their revenue streams, reduce costs, and improve efficiencies through data management and context mastering have the potential for market reassessment. It is also forecasted by TrendForce that in the second quarter of 2026, traditional DRAM contract prices will increase by 58%-63% quarter-on-quarter, while NAND Flash contract prices will rise by 70%-75%. Furthermore, DRAM capacity continues to shift towards server applications, and more NAND capacity is being allocated to enterprise SSDs. Additionally, companies like Apple Inc. have raised prices for MacBook and iPad, while Microsoft Corporation's Xbox models have also seen price increases, showing the transmission of the "AI data center massive storage grab" to consumer electronics devices. This has caused the market to reconsider that although AI hardware computing power chains are booming in profits, there is also a growing risk in valuations, positions, and elasticity of terminal demand, which is why popular AI computing power stocks collectively plummeted last Friday. In contrast, some software companies do not face direct BOM pressure and can leverage AI capabilities to improve profit margins through subscriptions, usage, conversion rate enhancements, and automation efficiency. The investment theme of AI seems to be transitioning from "who controls the supply of computing power" to the second stage of "who can convert computing power into high ROI workflows." Since 2023, a myriad of storage chip manufacturers and data center power and optical interconnect infrastructure companies have been the biggest beneficiaries of the wave of AI capital expenditures. However, data disclosed by SemiAnalysis reveals that AI model layers, cloud computing, and AI application manufacturers are rapidly seizing value capture rights. The annual revenue of Anthropic has jumped from around $9 billion at the beginning of the year to over $44 billion, and the gross margin of the inference infrastructure has increased from 38% to over 70%. The core reason for this is that intelligent AI entities have transformed tokens from "chatter costs" into substitute resources for manpower, code, analysis, and operational processes. Goldman Sachs Group, Inc.'s latest research report indicates that intelligent AI agents and other AI agents are expected to drive token consumption by 24 times through 2030, shifting the AI value chain from a one-way profit harvesting "AI hardware selling shovels" scenario to a reallocation phase of "hardware cost reduction - explosive token usage - improvement in gross margin for large models and application software." It is known that NVIDIA Corporation has announced that its new Vera Rubin NVL72 chip compared to the GB200 NVL72 chip can reduce the cost of highly interactive and deeply reasoning AI intelligent agents per million tokens to one-tenth. The hardware iteration is continuously pushing down the unit token cost. However, it is more subtle that if large model manufacturers and cloud leaders like Neocloud (representing leading new cloud players like CoreWeave) have already gained higher profit margins due to the decline in unit token cost, suppliers like NVIDIA Corporation, Taiwan Semiconductor Manufacturing Co., Ltd., HBM/DRAM/NAND may be motivated to raise prices to reclaim a portion of the economic rent. Especially in the context of ongoing scarcity of advanced processes such as N3 or 2nm, HBM, high-speed memory SOCAMM, enterprise SSDs, data center CPUs, and the entire AI infrastructure, the hardware layer does not lose its value; rather, the investment logic shifts from "indiscriminate rise due to explosive demand" to "who can retain pricing power during the efficiency enhancement cycle." This explains why, after the AI semiconductor stock sector experienced intensified volatility, funds are beginning to seek AI software assets whose valuations have not fully reflected AI commercialization dividends. Senior analyst Borges from Goldman Sachs Group, Inc. sees an important potential logic for the recovery of software stocks as the AI computing power industry chain becomes increasingly crowded. This Wall Street analyst believes that companies at the intersection of customer experience, marketing automation, customer data platforms, and AI intelligent entities that can integrate customer data, real-time behaviors, marketing touchpoints, customer interactions, and industry workflows are approaching a "strong upward reversal window." According to Goldman Sachs Group, Inc. and other Wall Street analysts, the pessimistic market narrative of "AI eliminating software" is overly linear, and companies that can fully integrate AI into their revenue streams, reduce costs, and improve efficiencies through data management and context control are likely to undergo a market reevaluation. How do other Wall Street analysts view software companies? You could even say they are more bullish. All 19 prominent Wall Street analysts covering Klaviyo have given it a positive "buy" rating, resulting in a unanimous "strong buy" consensus rating. With the stock trading at $14.90, the average target price of $29.94 implies a staggering potential upside of 101% in the coming year. On the other hand, all 17 recent reports by prominent Wall Street analysts covering Braze have resulted in a unanimous "strong buy" consensus rating for the stock. With the stock currently trading at $21.02, the average target price of $35.07 suggests a potential upside of approximately 67% over the next year. In conclusion, Klaviyo and Braze are seen as two top software companies that are poised to benefit from the ongoing AI revolution, with strong growth prospects and the potential for significant stock price appreciation in the year ahead. (Please note that the last section regarding Klaviyo and Braze is based on hypothetical scenarios and opinions presented in the context of the provided content.)