Citi analysts identified a fundamental opportunity in software stocks amid a selloff, screening for names down at least 10% with positive EPS revisions and falling terminal multiples. The bank flagged 22 stocks, including Dynatrace, Microsoft, and Cloudflare, as well-positioned for any AI scenario.

Citi argues recent weakness reflects punished terminal multiples over AI disruption fears, not near-term fundamentals, estimating a 10% S&P Software & Services group multiple cut is fully priced. The firm sees upward revisions as a key catalyst, especially in a volatile bull market.