The analyst noted structural shifts in software valuations, with legacy growth metrics becoming less reliable. Thill advised investors to prioritize firms with internal AI adoption and durable business models, contrasting them against peers reliant on external AI partnerships. The sector's 24% index drop contrasted sharply with individual stock declines, underscoring divergent risk profiles.

Upgraded stocks like Procore were positioned for revenue reacceleration as infrastructure spending rebounds, while Atlassian's collaboration tools aligned with AI-driven development trends. Downgraded names faced uncertain growth trajectories, with Freshworks' core business exposed to AI-driven automation threats.