The software sector is trailing AI stocks due to investor fears of AI’s impact. Despite this, software companies are performing well fundamentally, trading at a discount of 25%. Microsoft’s latest earnings report shows strength in Azure and AI workloads, with revenue exceeding guidance. ServiceNow also excels, leading in AI monetization and profitability, with a raised fair value estimate of $1,060 per share.

Read more at Morningstar: Beaten-Down Software Stocks Are Still Good Buys, Despite Investors’ AI Fears