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UBS Analyst Identifies Three Software Stocks With Significant AI-Driven Upside Potential
Technology Services · Packaged Software · bnn_bloomberg · 2026-08-24
UBS managing director Kevin McVeigh highlights Constellation Software, SS&C Technologies, and Thomson Reuters as resilient picks in the evolving AI landscape.
What Happened
Software Sector Valuation: Despite a recent market rebound, software stocks remain undervalued relative to their historical growth rates. UBS analyst Kevin McVeigh notes that current market pricing reflects overly pessimistic long-term growth expectations for established industry players.
Strategic AI Moats: Companies with mission-critical software, high switching costs, and proprietary data are well-positioned to defend against large language model disruption. These firms possess deep regulatory expertise and specialized intellectual property that general-purpose AI platforms struggle to replicate.
Company-Specific Investment Cases: Constellation Software continues to leverage its prolific acquisition strategy, while SS&C Technologies benefits from deeply embedded financial infrastructure. Thomson Reuters is focusing on internal AI model development to optimize costs while maintaining high-quality legal data curation.
Regulatory and Operational Outlook: Firms are increasingly focused on managing AI-related expenses through tiered usage models and in-house technology. While integrating new AI tools, these companies remain committed to data security and regulatory compliance to protect their multinational client bases.
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