Following a recent sell-off in the technology sector, Morgan Stanley is advising investors to consider nine established tech companies currently trading at valuations not seen since the cloud crisis, according to a report released February 16, 2026.
The investment bank’s recommendations focus on companies poised to benefit from the long-term growth of generative artificial intelligence, despite recent anxieties surrounding the technology’s potential impact on the software industry. Notably absent from the list is NVIDIA, the current leader in AI chip manufacturing.
Morgan Stanley analyst Keith Weiss, in a client note cited by finanzen.net, highlighted a significant correction in the software sector. “Peak uncertainty has severely impacted software multiples,” Weiss wrote, noting a roughly 33 percent decline since October 2025. He added that valuations have fallen to levels last seen during the height of uncertainty surrounding cloud computing businesses.
The firm believes current concerns about generative AI are overstated, arguing that investors are underestimating the strength of existing market leaders. According to the note, “Bear-case arguments around GenAI appear to give too little credit to the ability of established software providers to participate in this innovation cycle.”
Morgan Stanley identifies Microsoft, Intuit, Salesforce, ServiceNow, Atlassian, Snowflake, Cloudflare, Shopify, and Palo Alto Networks as particularly attractive “buy-the-dip” candidates. The bank cites strong product cycles, improving financial metrics, and currently discounted valuations as key factors. Microsoft is described as “a clear participant in the most important innovation cycles,” although Intuit’s valuation is deemed “very attractive.” Salesforce has demonstrated strong growth, with AI-related annual recurring revenue increasing 114 percent year-over-year. Shopify is considered “best positioned to capture more than its fair share of a growing online commerce pie.”
Despite short-term volatility, Morgan Stanley remains optimistic about the long-term prospects of the AI sector, estimating that generative AI could add approximately $400 billion to the total addressable market for enterprise software by 2028.
Recent data indicates ongoing anxieties within the software and IT sectors. According to a report from February 4, 2026, shares of SAP have been under pressure, becoming the weakest performer in the DAX index with losses exceeding 20 percent. JPMorgan expert Toby Ogg noted on February 4th that the sector is being “condemned before the process even begins,” with even positive earnings reports failing to convince the market. The concerns center around the potential disruption of traditional business models by new AI tools and the challenges of transitioning to new revenue models.
Morgan Stanley’s recommendations approach as software and IT values continue to struggle amid broader “KI-Angst,” as reported by finanzen.net. The bank’s assessment suggests a potential buying opportunity for investors willing to appear beyond the current market anxieties.
