We're lifting our price targets on 2 stocks that have shaken off AI disruption concerns

This is less a stock-specific rally than a discount-rate trade leaking into equities. The first-order winner is still high-quality software, but the second-order winner is the subset with durable FCF and low need for incremental balance-sheet leverage, because lower real yields mechanically re-rate long-duration cash flows faster than AI optimism alone can. If the next CPI/PPI pair cools, the move can extend even without estimate changes; if they re-accelerate, the unwind should hit the most crowded mega-cap software names first.

CME is a cleaner expression of the current regime than most equity longs: the market is paying up for uncertainty around the Fed path, and that supports futures/options activity even if the macro backdrop is not obviously improving. The catalyst window is days to two weeks around inflation and jobs, not months; once the data passes, implied volatility in rates may compress unless the labor print meaningfully breaks lower. DOCU and ZS are useful sentiment tells tonight, but more as factor confirmation than as standalone alpha.

The contrarian miss is that this software rebound is being treated as an AI vindication trade, when the bigger driver is multiple repair from falling yields. That makes the group much more fragile to any hot data surprise than consensus seems to believe. TGT is a secondary read-through: a weak jobs print helps rates but hurts consumer-demand expectations, so the net market reaction could still favor growth over retail unless the labor market deteriorates enough to raise recession odds.