AI hits software stocks but boosts demand for cybersecurity

It is news to nobody that the rise of artificial intelligence has dramatically shaken the tech sector investment world in 2026, but hidden behind the headlines about the so-called SaaSpocalypse is a bright spot, where experts believe the investment case is improved by AI rather than destroyed by it.

In both public and private sector investment, AI has spooked the horses, with the number of start-up deals in Australia falling markedly, and software shares on the ASX and tech-heavy Nasdaq deeply underwater.

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