CITIC Securities research says the "AI-eats-software" narrative is being
gradually disproved. Leading vendors’ revenue and backlogs remain on robust
growth paths and application-software fundamentals have not shown the structural
slowdown markets feared. Model vendors are advancing enterprise adoption by
embedding models into existing workflows such as CRM, ERP, ITSM and HCM.
Traditional software firms’ data, industry expertise and client service remain
core barriers to displacement. In the near term, rising model commoditization
and a higher AI revenue mix at software companies are likely to support
continued valuation re-rating in the U.S. software sector. Medium-term, whether
the sector’s recovery becomes a fundamental turnaround depends on AI products
driving overall revenue growth; the next one to two quarters are an important
observation window.
