2 AI Stocks With 85% and 70% Upside to Buy During a Software Bear Market

Software stocks have experienced significant declines this year, with application software falling 21% and software infrastructure dropping 14%, creating what analysts have termed a “SaaSpocalypse” bear market. Despite this downturn, two artificial intelligence-focused companies are positioned for substantial upside potential according to Wall Street analysts.

Palantir Technologies stands out as one of the AI stocks with significant growth prospects. Since OpenAI launched ChatGPT in late November 2022, Palantir’s shares have surged by 1,900%, driven by its Artificial Intelligence Platform (AIP). This comprehensive software fabric integrates the company’s core platforms Foundry, Gotham, and Apollo. Following the debut of AIP, Palantir’s growth has accelerated dramatically, with Citigroup analyst Tyler Radke rating the stock a strong buy and placing a price target of $260, representing approximately 70% upside from current levels.

The second AI stock highlighted for its potential is ServiceNow, which is positioned to become an AI orchestration layer for enterprise clients. While specific upside percentages for ServiceNow were not detailed in the verified sources, the company is cited alongside Salesforce as having “huge potential upside after their sell-offs” during the software bear market. ServiceNow’s strategic positioning at the center of customer data and workflows is viewed as a key advantage in navigating the AI transition.

Market analysts note that while AI excels at generating code quickly, it often struggles with maintenance. An Alibaba study found that 75% of code created by AI models failed within a year due to sacrificed quality for speed. Claude Code, Anthropic’s AI coding tool, has reportedly deteriorated since release, with customers citing security issues and reliability concerns. These limitations create opportunities for established software platforms that focus on maintaining and integrating AI-generated code rather than just producing it.

The ongoing sell-off in software stocks has been attributed to concerns that agentic AI coding tools like Claude Code will enable organizations to create custom software easily, potentially reducing demand for traditional software seat licenses. However, analysts counter that companies sitting at the core of their customers’ data and workflows—such as Palantir, ServiceNow, and Salesforce—are better positioned to survive and thrive as AI reshapes the software landscape.

As of March 16, 2026, Wall Street continues to identify select AI software stocks as buying opportunities during the software sector downturn, emphasizing firms with strong positioning in enterprise AI integration rather than those vulnerable to AI-driven displacement of traditional software models.