Enterprise software has been one of the market&#x27;s biggest losers, but are investors overreacting to AI fears? Piper Sandler&#x27;s Billy Fitzsimmons joins us to break down whether AI is truly disrupting the software business model, why valuations have collapsed, where opportunities still exist, and how Microsoft, Oracle, and the hyperscalers fit into the next phase of the AI investment cycle. We also discuss vibe coding, consumption-based pricing, AI infrastructure spending, and why the eventual IPOs of OpenAI and Anthropic could reshape the entire software landscape.<br><br>For full disclosure information visit: http://www.pipersandler.com/researchdisclosures

Software's AI Reckoning With Billy Fitzsimmons

What's Next For Markets

What's Next For Markets? I'm Michael Kantrowitz, Chief Investment Strategist at Piper Sandler, where I lead the Portfolio Strategy Team ranked number one on Wall Street in the All-America Institutional Investor Research Survey. Software has become one of the most intensely debated areas of the market. The group has fallen roughly 25% from its September 2025 highs, but the underlying fundamentals

have not deteriorated nearly as much as the stocks might suggest. That leaves investors wrestling with a much bigger question, is this simply a valuation reset, or is artificial intelligence beginning to undermine the traditional software business model? To help us separate the real risks from the market narratives, we're joined by our colleague Billy Fitzsimmons, Senior Research Analyst at Piper Sandler, who covers enterprise software.

We discuss whether AI will reduce the number of software seats companies need, how vibe coding could change the competitive landscape, and why investors are increasingly valuing software companies after accounting for stock-based compensation. We also explain where Billy believes investors can still find opportunity, including hyperscalers, consumption-based businesses, and select vertical software companies.

Later, we dig into the enormous capital spending behind the AI infrastructure build-out, the growing balance sheet debate surrounding Oracle, what Microsoft needs to demonstrate with Copilot, and why the eventual public listings of OpenAI and Anthropic could be a major clearing event for the entire software sector. Billy, thanks for joining us. Let's begin with the question you're hearing most often from clients. After a 25% correction, is it finally time to become more constructive on software?

Thank you so much for having me, Michael and Stephen. It's great to be here. Launched at Piper at the start of this year, but have been covering enterprise software for about 10 years collectively, including most of the names in...

Software's AI Reckoning With Billy Fitzsimmons

Read the full transcript

The candid version is on a podcast,
not the earnings call.

Software's AI Reckoning With Billy Fitzsimmons

Read the full transcript

The candid version is on a podcast, not the earnings call.

The candid version is on a podcast,
not the earnings call.