3 Enterprise Software Stocks Riding the Shift in AI Spending

Tech stocks are back in the spotlight as investors weigh wild market swings, uneven returns and new policy signals from central banks and regulators. In this article, we examine how technology sector stock screeners are responding to that mix, focusing on large, well-valued software, hardware, and semiconductor companies with large market capitalizations and strong fundamental scores. The three stocks in our screener appear to be actively exposed to recent news flows regarding volatility, inflation trends, trade and environmental regulations. Each may offer a different way to lean into or exit from the current set of risks and potential opportunities.

Smart Seat (SMAR)

overview: Smartsheet is a cloud-based work management platform that enables organizations to plan, track, automate, and report on work through tools such as grids, dashboards, forms, resource management, and digital asset management. From aerospace and medical to government and software, we serve a wide range of sectors and centralize workflow and collaboration for large teams.

operation: Smartsheet generates approximately US$1.08 billion in revenue from Internet software and services, of which the United States accounts for approximately US$918.07 million, with the remainder coming from EMEA, Asia Pacific, and the rest of the Americas.

Market capitalization: 7.9 billion USD

Smartsheet provides direct access to enterprise software, which is beneficial if your company is looking for a cloud-based tool to manage complex work. The stock also performs well in the technology sector, which has seen renewed interest in more volatile markets. The company remains in the red and is completely reliant on external borrowing, which could lead to disappointing sales and higher financing costs. Analysts currently expect sales and profits to increase and return on equity to improve. Smartsheet is also committed to AI with connections to leading AI platforms and its companion Smart Assist, as well as a revamped leadership team focused on growth and financial discipline. For some investors, these factors may be more important than the headline valuation discussion.

Smartsheet’s AI efforts, leadership reset, and shift to revenue growth may be masking a real turning point in the company’s history, and analyst predictions for Smartsheet may highlight things the market hasn’t fully priced in yet.

New Relic (NEWR)

overview: New Relic is a software-as-a-service company that helps businesses monitor their digital systems by collecting and analyzing data from applications, infrastructure, and user activity in one unified platform. Its tools give IT and engineering teams visibility into performance issues in real time, so they can keep websites, apps, and services running smoothly for their customers.

operation: New Relic generates approximately $967.64 million in revenue from software and programming.

Market capitalization: 6.18 billion USD

New Relic operates in a more volatile technology market. Observability software is so tied to the day-to-day reliability of digital services that many companies treat them as a necessity rather than an option. The company remains in the red with low return on equity and is fully dependent on external borrowings, so financing and dilution risk are important. New Relic is also working on AI-focused features like Autopilot, ground truth, and AI coding observability designed to reduce incident response time and development costs. These trends are part of the reason investors are paying attention to the company.

New Relic’s AI-heavy observability efforts are accelerating, but the real story may be in how capital needs, deficit profile, and product bets come together. 2 major rewards and 1 important warning sign suggest a tipping point most investors are missing

Extreme Networks (EXTR)

overview: Extreme Networks builds the wired and wireless networking gear and cloud software that keeps large venues, businesses, and public sector organizations connected, from Wi-Fi access points and campus switches to AI-driven network management and security tools.

operation: Extreme Networks generates approximately $1.25 billion in revenue from the development and marketing of network infrastructure equipment and related software.

Market capitalization: 4.05 billion USD

Extreme Networks enables you to experience the backbone of digital connectivity, from Wi-Fi 7 stadiums like Nissan Stadium to AI-centric cloud platforms that support hybrid work and data-intensive applications, at a time when both technology infrastructure and market volatility are in the spotlight. Revenue is turning profitable, with forecasts pointing to strong revenue growth and high future ROE, and the company is focused on high-margin subscription-based services. However, there are questions about its high funding risk, slower revenue growth than some of its peers, increased government and service provider demand, and recent insider sales. The real mystery for investors is how these strengths and pressure points will come together as AI networking, multibeam Wi-Fi, and large-scale venue wins begin to expand.

Extreme Networks’ entry into AI-centric networking and subscription services could reshape its earnings profile, but the real tension between funding risk and opportunity lies in the expectations of Extreme Networks analysts.

The three technology stocks mentioned in this article are just a starting point. The full screen identified 32 additional large, well-valued companies with stories as compelling as those outlined in the Technology Sector Stock Screen. Use Simply Wall St to analyze these companies side-by-side and filter for the triggers and stories that matter to you to identify the highest-conviction opportunities across software, hardware, and semiconductors.

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Looking for new options before momentum shifts?

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This article by Simply Wall St is general in nature. We provide commentary using only unbiased methodologies, based on historical data and analyst forecasts, and articles are not intended to be financial advice. This is not a recommendation to buy or sell any stock, and does not take into account your objectives or financial situation. We aim to provide long-term, focused analysis based on fundamental data. Note that our analysis may not factor in the latest announcements or qualitative material from price-sensitive companies. Simply Wall St has no position in any stocks mentioned.

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