Goldman Sachs analyst Kash Rangan believes artificial intelligence is not a threat to software, but rather the spark for its revival. Speaking at the Communacopia + Technology conference, he argued AI will act as a force multiplier for application software, streamlining usage and driving growth opportunities.
Rangan compared the current AI wave to the introduction of the web browser in the 1990s. At the time, many thought browsers would make software obsolete, but instead they expanded the industry. He sees a similar trajectory now, with AI working alongside software to unlock broader adoption and efficiency.
Key Points from Rangan’s Outlook:
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SaaS Potential: Companies like Salesforce, Intuit, Adobe, and ServiceNow remain central to the shift. Salesforce’s AI-driven Agentforce, which serves around 8,000 customers, could be a growth engine if expanded to 14,000.
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Valuation Gap: Application software stocks have struggled with depressed valuations, while infrastructure players such as Snowflake and MongoDB have fared better. Rangan views this as an opportunity for long-term investors.
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Speculative Bet: He highlighted CoreWeave as a riskier pick. Positioned as the only pure-play AI hyperscaler in public markets, its growth depends on maintaining speed-to-market advantages, similar to early Amazon Web Services.
Rangan dismissed talk of an AI bubble in public markets, suggesting overvaluation is more of an issue for private firms backed by venture capital, such as OpenAI and Anthropic, which are still refining their business models.
His thesis is that AI integration will not diminish software firms but instead give them renewed relevance, setting up application software companies for what he calls a “rebirth.”
