Jensen Huang Says Software Companies Are About to Benefit From AI. These 2 Stocks Could Win Big

Veeva Systems and Adobe both posted solid operating results despite recent share-price weakness: Veeva revenue rose 16% year over year to $882.9 million with adjusted EPS of $2.24, while Adobe revenue increased 13% to a record $6.62 billion and adjusted EPS rose almost 18% to $5.96. Both companies are integrating AI into their products, with Veeva launching Veeva AI and Adobe reporting AI first ARR above $500 million. The piece is broadly bullish on both stocks as beaten-down software names with durable fundamentals and AI upside.

Analysis

The market is treating AI as a substitution threat to incumbent software, but this setup is more likely to create a bifurcation: platforms with embedded workflows and high switching costs should capture the AI spend rather than lose it. That favors VEEV and ADBE because both sit inside mission-critical production processes, so AI is additive to retention and wallet share instead of purely a feature race. The second-order winner is likely the vendor with the deepest distribution and data context, while standalone AI tools face a harder monetization path once customers demand governance, auditability, and integration.

For VEEV, the key underappreciated lever is not just revenue growth but expansion of the addressable product surface inside a highly regulated industry. If agentic automation reduces implementation friction and admin workload, it can shorten sales cycles and lift net retention over the next 4-8 quarters, which matters more than near-term sentiment. The main risk is that life sciences IT budgets are lumpy and a few large customer delays can mask the underlying acceleration, so the stock can stay cheap longer than fundamentals would suggest.

For ADBE, the bear case assumes AI destroys pricing power, but the more likely path is that AI increases content creation volume and therefore usage intensity across the installed base. That would support seat retention while monetizing incremental AI features through higher ARPU, especially if AI-first revenue keeps compounding from a still-small base. The key risk is execution: if AI monetization lags product adoption, the market will keep assigning a structural multiple discount until management proves AI translates into durable RPO expansion, not just feature headlines.

The broader contrarian signal is that these names may be trading on positioning and narrative fatigue more than deteriorating fundamentals. That creates a favorable setup for a 6-12 month mean reversion trade, but not necessarily a straight-line rerating; the cleaner opportunity is to buy weakness after earnings and use defined-risk structures because the upside depends on sustained guide beats, not just cheap valuation.

Key Decisions for Investors

• Long VEEV on a 3-6 month horizon; add on any post-earnings drawdown of 5%+ if growth and margin trends remain intact. Risk/reward favors a rerating toward premium SaaS multiples if AI reduces workflow friction and retention stays elevated.
• Long ADBE on weakness with a 6-12 month view; prefer staggered entries around earnings because the main catalyst is proof of AI monetization rather than macro multiple expansion. Upside is strongest if AI-first ARR continues to scale faster than overall revenue.
• Pair trade: long VEEV / short a basket of lower-switching-cost SaaS names over the next 2 quarters. Thesis is that regulated, embedded software should outperform generic applications if AI compression is the market’s real fear.
• For ADBE, consider a call spread instead of outright stock for the next 9-12 months. Defined-risk upside captures a rerating if AI revenue becomes visibly material, while limiting downside if the market keeps demanding proof.
• Avoid chasing NVDA here; the article’s AI inference is software-specific, and the better expression is owning the application layer where AI can translate into monetization and retention rather than just compute demand.