As investors debate whether artificial intelligence will ultimately make large portions of the software industry obsolete, it is becoming increasingly important to separate which types of software are vulnerable from those that are structurally resilient. AI will undoubtedly disrupt certain areas, particularly simple applications, dashboards, and point solutions that can be replicated quickly with generative tools. But not all software is created equal.
The businesses most at risk tend to be those that rely on surface-level functionality with limited switching costs. By contrast, software platforms built around network effects, deeply embedded infrastructure or proprietary data among other things, are more difficult to displace. In many cases, AI acts less as a replacement and more as a force multiplier for these companies.
, , and stand out as examples of software businesses whose core value propositions are not easily disrupted by AI and may ultimately be strengthened by it.
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Cloudflare: The On Ramp to the Modern Internet
Cloudflare operates one of the most critical layers of modern internet infrastructure, providing security, performance, and connectivity services that sit between users and the web itself. Its global network spans hundreds of cities and handles a meaningful portion of all internet traffic, positioning Cloudflare as a foundational on-ramp to the digital economy.
This infrastructure-heavy, network-based model makes Cloudflare difficult for AI to displace. While AI can generate code or optimize workflows, it cannot easily replicate a globally distributed edge network with deep enterprise and developer integration. In practice, AI increases demand for Cloudflare’s services by driving more traffic, more applications, and more security complexity.
From a growth perspective, the company remains firmly in expansion mode. Sales are expected to grow 28.4% this year and 26.8% next year, while earnings are projected to compound at roughly 26.8% annually over the next three to five years. Technically, the stock appears to be breaking out from a descending wedge pattern, often a signal that momentum may be accelerating after a prolonged consolidation phase.
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AppLovin: A Scaled Advertising Network
AppLovin is best understood not as a traditional software provider, but as a scaled digital advertising network with deep data, distribution, and optimization capabilities. Its platform connects advertisers with a massive ecosystem of mobile apps, leveraging proprietary data and AI-driven targeting to maximize ad performance.
This structure is inherently resistant to disruption. While AI can assist in ad creation, it does not replace the value of an established network, historical performance data, or demand-side relationships. In fact, AppLovin has been among the most aggressive companies in embedding AI directly into its platform to enhance monetization and operating leverage.
The company’s growth outlook remains exceptional. Sales are forecast to rise 18.2% this year and accelerate to 38.2% next year, while earnings are expected to surge 106% this year and another 62.5% next year. AppLovin also carries a Zacks Rank #2 (Buy). Unlike many high-growth software peers that trade primarily on revenue multiples, AppLovin stands out for its more reasonable valuation, currently trading at approximately 30.4x forward earnings.
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MongoDB: The Data Layer AI Depends On
MongoDB provides a core piece of modern application infrastructure: a flexible, scalable database platform designed to handle unstructured and rapidly evolving data. Rather than competing with AI, MongoDB sits beneath it, enabling developers to build, scale, and adapt AI-powered applications efficiently.
Databases represent one of the hardest layers of software to disrupt. Switching costs are high, integrations are deep, and reliability is critical. As AI workloads grow more complex and data intensive, demand for flexible data architectures like MongoDB’s is likely to increase rather than decline.
Financially, the outlook remains solid. Revenue is expected to grow 21.5% this year and 17.8% next year, while earnings are projected to expand at roughly 24.3% annually over the next three to five years. MongoDB also currently holds a Zacks Rank #1 (Strong Buy). From a technical standpoint, the stock has traded in a wide range since peaking in 2021. After failing to sustain a breakout in early 2024 and correcting sharply into 2025, the post-shakeout setup appears constructive. A decisive move above the $425 resistance level would signal a potential trend change.
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Should Investors Buy Shares in APP, MDB, and NET?
AI will reshape the software industry, but it will not flatten it. The companies most likely to endure, and thrive are those embedded in infrastructure, data, and networks where replacement risk is low and switching costs are high. Cloudflare, AppLovin, and MongoDB each occupy critical positions within their respective ecosystems that AI cannot easily replicate
After a broad software selloff and a sharp reset in expectations, these stocks now offer exposure to durable growth at a time when fear, rather than fundamentals, has driven valuation. For investors willing to be selective, these three names represent software businesses that AI is more likely to empower than disrupt.
This article originally published on Zacks Investment Research (zacks.com).
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