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

Wall Street has been bearish on software companies. Some investors and analysts believe that artificial intelligence (AI) will significantly impact the industry, rendering many products and services offered by software specialists obsolete. However, at least one notable name in the AI world disagrees. Jensen Huang, the CEO of Nvidia (NASDAQ: NVDA) and arguably one of the most important thought leaders in the industry, said at a recent technology trade show that it's a great time to be a software company, as AI could improve their products and services rather than replace them. If he's right, it may be worth investing in beaten-down software stocks poised to rebound. Let's consider two excellent options: Veeva Systems (NYSE: VEEV) and Adobe (NASDAQ: ADBE).

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1. Veeva Systems

Veeva Systems is a SaaS (Software as a Service) company that delivers cloud-based solutions for companies in the life sciences sector. Veeva Systems is a leader in its niche of the cloud industry, thanks to its tailored products that meet the specific needs of its clientele. Pharmaceutical and medical device companies must deal with a stringent regulatory landscape, substantial upfront investments to develop products that may not reach the market for years, data integrity and privacy issues, and more.

Veeva Systems helps them navigate this maze. Veeva's services are very valuable to its clientele. It's no wonder that 15 of the top 20 biopharmaceutical companies are among its customers. And despite a falling stock price, the company continues to post solid financial results. In the first quarter of its fiscal year 2027, ending on April 30, Veeva Systems' revenue increased by 16% year over year to $882.9 million. The company's adjusted earnings per share (EPS) came in at $2.24, up from the $1.97 reported in the year-ago period.

Veeva Systems is evolving with the times. The company is using AI to improve its products. It launched Veeva AI, an agentic AI system designed to automate and simplify many tasks. And of course, Veeva Systems designed it still with the needs and demands of life science industries in mind. Meanwhile, Veeva Systems still has a vast addressable market. The company sees a more than $20 billion opportunity, whereas its trailing-12-month revenue is only $3.3 billion.

Further, Veeva enjoys a strong competitive edge due to switching costs, as its customers rely on its services for day-to-day operations. Veeva Systems' moat, significant white space, and efforts to incorporate AI into its services make the stock likely to bounce back and offer solid returns from its current levels.

2. Adobe

Adobe is another SaaS leader that investors have sold off over the past year, though, in fairness, leadership changes have played a role in its poor performance as well. But the business itself isn't doing that badly. Adobe remains a leader in providing software that allows users to create and edit digital content. With generative AI tools fully capable of doing much of the same work, the company's services will go out of style, or at least, so the argument goes. It's worth noting, though, that this hasn't happened yet. It doesn't even look particularly close to doing so based on Adobe's financial results.

In the second quarter of its fiscal year 2026, ending on May 29, Adobe's revenue increased by 13% year over year to a record $6.62 billion. The company's adjusted EPS came in at $5.96, up almost 18% year over year. Adobe raised its adjusted EPS guidance for fiscal year 2026. Adobe also ended the quarter with $22.27 billion in Remaining Performance Obligations, which increased slightly -- from $22.22 billion -- quarter-over-quarter.

Meanwhile, Adobe is slowly adding AI tools to improve its products and services, and by the looks of it, its efforts are already having an impact on the business. As management said during its latest earnings conference call: "Adobe's AI innovation has driven an impressive 3x year-over-year increase in AI first ARR [Annualized Recurring Revenue] to greater than $500 million." This makes a strong case for Adobe's long-term ability to benefit from AI, especially given the company's strong competitive advantage from switching costs. All these factors suggest Adobe could be an attractive stock to buy on the dip and hold onto for a while.

Prosper Junior Bakiny has positions in Nvidia. The Motley Fool has positions in and recommends Adobe, Nvidia, and Veeva Systems. The Motley Fool recommends the following options: long January 2028 $330 calls on Adobe and short January 2028 $340 calls on Adobe. The Motley Fool has a disclosure policy.