3 Software Stocks With Recurring Revenue as AI Spending Gets Rethought

With AI leaders calling for a slowdown and chip stocks under pressure, investors suddenly face a market that is rethinking expensive AI build outs. That kind of reset can create rare openings for quieter software and platform stocks tied more to subscriptions and transactions than to massive data center budgets. This article walks through three stocks exposed to this AI news shock and why each could matter for your portfolio.

The stocks covered below are only a small sample of what fits this theme, and the full screen surfaced 61 more software and platform companies with equally compelling stories that are not covered here. To identify and analyze the highest conviction ideas built around subscription and transaction models with conservative financial filters, head straight into the Defensive Software and Platforms with Low AI Capex Dependence screener.

Okta (OKTA)

Overview: Okta provides identity and access management software that lets organizations control, secure, and monitor how people and AI agents access digital systems.

Operations: Okta generates about US$3.1b in revenue by selling multi-year subscriptions to its cloud-based identity and access management platform.

Market Cap: US$29.1b

Okta fits this defensive software screen because it sells subscription security infrastructure that enterprises treat as essential plumbing, while remaining less tied to heavy AI hardware spending than chipmakers or model providers.

"If every organization manages not only employees but also thousands of AI Agents in the future, Okta’s addressable market could become significantly larger than investors currently assume."

The real test for investors is how one unresolved question around monetising those identity events ultimately shapes Okta’s long-run earnings power.

That unresolved earnings question is exactly what the full narrative for Okta unpacks, revealing what could accelerate, cap, or completely reshape Okta’s long term profit story.

Tenable Holdings (TENB)

Overview: Tenable Holdings provides subscription cyber exposure and vulnerability management software that helps organizations find, prioritize, and reduce security risks across IT, cloud, AI, and operational technology environments.

Operations: Tenable generates about US$1.0b in revenue from Security Software & Services, with meaningful sales across the United States, EMEA, Asia Pacific, and other Americas regions.

Market Cap: US$3.3b

Tenable Holdings fits this defensive screen because it sells recurring cyber risk software that helps customers manage exposure across cloud and AI systems without depending on large AI hardware budgets.

"The accelerating shift towards digital transformation and cloud adoption is expanding organizations' attack surfaces, driving sustained demand for Tenable's unified exposure management platform. This is expected to grow total addressable market and provide strong long-term revenue tailwinds."

The real tension for Tenable is how one execution test around turning that platform interest into durable, high quality margins ultimately plays out.

That execution test sits at the center of the full narrative for Tenable Holdings, which maps how platform demand, pricing power, and competitive pressure could reshape Tenable’s long term earnings mix.

Similarweb (SMWB)

Overview: Similarweb provides subscription digital intelligence, helping businesses track online traffic, competitors, and customer behavior to inform marketing and commercial decisions.

Operations: Similarweb generates about US$296 million in revenue from its online financial information provider activities, primarily through recurring SaaS subscriptions.

Market Cap: US$712 million

Similarweb fits this defensive software theme because its SaaS analytics are tied to ongoing digital activity rather than big-ticket AI hardware cycles. This can give investors exposure to data-driven decision making without relying on the same infrastructure spending swings that move chip-heavy businesses.

"Multiyear, high-value contract wins and rising share of recurring revenue (57% of ARR under multiyear agreements, up from 44% YoY) enhance revenue durability and operational leverage, contributing to higher net margins and predictable future earnings."

What happens to Similarweb’s margin story depends heavily on how one emerging source of demand reshapes its mix of recurring contracts.

As that contract mix shifts, the full narrative for Similarweb shows how Similarweb’s recurring demand, pricing power, and AI data leverage could quietly accelerate the entire earnings profile.

Seeking Fresh Alternatives Before They Fly

Markets move fast. Breakout momentum, dropping sentiment, and fresh ideas rarely stay under the radar for long. Before the crowd catches on and pricing shifts, consider acting while opportunities are still developing.

• Explore early-turn momentum in resilient businesses by running the 15 high quality undiscovered gems while these under-the-radar stories still trade ahead of broad attention.
• Identify cash-generating AI leaders with the 74 profitable AI stocks that aren't just burning cash so you focus on operators funding expansion from real earnings rather than frequent capital raises.
• Evaluate durable income streams through the curated 6 dividend fortresses and review which high-yield payers match your risk tolerance before any potential yield changes.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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