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The broad sell-off in software stocks may be creating opportunities for investors willing to be more selective, according to Tyler Radke, U.S. software equity research co-head at Citigroup Research . Radke said on CNBC’s ” Power Lunch ” Wednesday that the current, “broad-based” pullback looks “overdone.” As proof of this, he pointed to Palantir , which rallied 7% on Tuesday after posting a fourth-quarter earnings and revenue beat but tumbled 12% on Wednesday. “We’ve seen a lot of selling — clearly, people running for the exits in terms of these software portfolios,” Radke said. “We do think this is a good buying opportunity, but I still think you need to be selective.” Radke added: “You want to own the names that you think are going to be relevant as we get to the other side of this AI trade. I think there’s a lot of uncertainty in application software, so our preferences are to own the names exposed to hyperscale data volumes.” The Citi analyst named Microsoft , MongoDB and Snowflake as among his top picks. He also highlighted ServiceNow as a top name within the application group that has a good AI strategy and could continue to drive growth from here. Microsoft and ServiceNow each added 1% on Wednesday, while MongoDB fell another 3% and Snowflake shed 5%.
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