Mizuho analyst Siti Panigrahi argues the recent pullback in software stocks presents a buying opportunity. AI disruption fears have hit SaaS valuations, but Panigrahi sees the weakness as largely company-specific. He believes vertical software is more resilient due to deep domain expertise and complex workflows.

Panigrahi notes that next-twelve-month EV/Sales multiples are now about 55% below their five-year peak and 30% below long-term averages. While he warns of potential volatility, he views the current risk-reward as attractive over the next twelve months. Mizuho's fourth-quarter checks showed solid demand trends, with AI adoption remaining strong.

The analyst reiterates Outperform ratings on Microsoft, Autodesk, Cadence Design Systems, and Synopsys, identifying Microsoft and Autodesk as preferred names heading into earnings. He argues vertical software should benefit from AI as agentic workflows drive higher usage and greater customer value.