'Software will eat AI,' HSBC says. Here are the bank's top picks

HSBC analysts predicted in their latest research report that software companies will emerge as the primary beneficiaries of artificial intelligence integration, a phenomenon they've termed 'software will eat AI,' challenging recent market concerns about AI's impact on the tech sector. The report, released in 2026, comes amid investor anxiety about how AI will reshape the technology landscape, with HSBC maintaining that established software giants will leverage AI to enhance their offerings rather than being disrupted by it. The 'software will eat AI' thesis suggests that rather than AI companies dominating the market, traditional software providers will incorporate AI technologies into their existing products and services, creating enhanced value propositions for customers. This perspective counters the narrative that pure-play AI companies will displace established software vendors, instead positing that integration and enhancement will be the dominant trend. HSBC analysts argue that software companies with strong existing customer bases, distribution channels, and domain expertise will be particularly well-positioned to capitalize on this shift. This analysis arrives during a period of market volatility surrounding AI investments, where investors have struggled to identify which companies will truly benefit from the AI revolution, with HSBC's research suggesting that the market may have overreacted to concerns about AI disruption, underestimating the adaptability of established software providers.