2 Tech Stocks That Could Go Parabolic

By Robert Izquierdo – Feb 27, 2026 at 12:00AM ESTKey PointsSoftware stocks took a hit as investors fretted over AI's disruptive potential.Two strong businesses experiencing share price drops are ServiceNow and Okta.Both are seeing year-over-year sales growth in the double digits.NYSE: NOWServiceNowMarket Cap$114BToday's Changeangle-down(4.86%) $5.07Current Price$109.30Price as of February 26, 2026 at 4:00 PM ETThese companies are going strong despite a stock sell-off.Wall Street's enthusiasm for artificial intelligence (AI) has cooled in 2026. Now, the market has swung toward concern for AI's downside implications. One of these is that the technology will obliterate many software companies, and investor fears led to a sell-off in the sector. This has dropped share prices in two excellent businesses for the AI era, ServiceNow (NOW +4.86%) and Okta (OKTA +3.08%). That has created an opportunity to buy these stocks at a compelling valuation. Here's why it makes sense to invest in these two companies right now. Image source: Getty Images. ServiceNow's strengths ServiceNow focuses on automating business workflows. Wall Street worries that the company's platform lends itself to AI stepping in to replace it. The reality is not so straightforward. ServiceNow's software has been using AI to perform workflow automation for some time now. This suggests customers want ServiceNow to handle AI integration and are unlikely to drop it in an effort to use AI on their own. CEO Bill McDermott reinforced this idea, explaining why the technology is not a threat to his business: "AI doesn't replace enterprise orchestration. It depends on it." In other words, AI can't operate in a vacuum. It needs the coordination and oversight provided by ServiceNow to avoid making harmful business mistakes. ExpandNYSE: NOWServiceNowToday's Change(4.86%) $5.07Current Price$109.30Key Data PointsMarket Cap$114BDay's Range$106.57 - $110.1552wk Range$98.00 - $211.48Volume27MAvg Vol16MGross Margin77.53% Customers realize this, and it's further validated by the company's performance. It ended 2025 with strong 21% year-over-year revenue growth to $13.3 billion. This helped 2025 net income rise to $1.7 billion compared to $1.4 billion in 2024. ServiceNow forecast first-quarter subscription revenue to increase 22% year over year $3.7 billion. This indicates no slowdown in its business. Okta's cybersecurity advantages Okta shares dropped after Anthropic released AI security software, raising concerns that artificial intelligence can eventually replace cybersecurity platforms. But what Wall Street isn't considering is that businesses aren't suddenly going to drop essential protections for unproven AI alternatives. Also, Anthropic's solution is designed to look for vulnerabilities in software, but that doesn't replace Okta's platform, which focuses on validating those who are supposed to have access to a client's IT systems. This keeps out bad actors; Anthropic's security update does not address this area. ExpandNASDAQ: OKTAOktaToday's Change(3.08%) $2.25Current Price$75.25Key Data PointsMarket Cap$13BDay's Range$72.84 - $76.4552wk Range$68.77 - $127.57Volume4.4MAvg Vol3MGross Margin77.08% Okta is also evolving its platform to differentiate between legitimate AI agents and malicious hackers. This is a key capability in the AI age, where automation is increasingly taking independent action. The company's performance validates this. In its fiscal third quarter, ended Oct. 31, 2025 revenue rose 12% year over year to $742 million. Net income increased to $43 million versus $16 million in the prior year, illustrating a strengthening bottom line. Compelling valuations With both ServiceNow and Okta shares down, their valuations are at a low point for the past year, as evidenced by their forward price-to-earnings ratios (P/E). Data by YCharts. This suggests now is a good time to buy. Both companies are seeing sales growth, positioning their stocks to experience an upswing over the long term after Wall Street's AI fears subside and a more measured perspective emerges.Read NextFeb 26, 2026 •By Eric VolkmanWhy Stock-Split Stock Service Now Triumphed on ThursdayFeb 26, 2026 •By Geoffrey SeilerPrediction: These Artificial Intelligence (AI) Stocks Will Be the Surprise Winners of the Software Sell-Off in 2026Feb 25, 2026 •By Adam LevyThis AI Company's CEO Says Its Stock Is a Once-in-a-Generation Opportunity, and He's Putting $3 Million of His Own Money Into ItFeb 24, 2026 •By Geoffrey SeilerPrediction: Agentic AI Will Be the Biggest Tech Trend of 2026. Here Are 2 Stocks to OwnFeb 24, 2026 •By Daniel SparksDown 34% Already in 2026, Is It Finally Time to Buy ServiceNow Stock?Feb 24, 2026 •By Geoffrey SeilerThis SaaS Leader's CEO Just Announced Plans to Buy Stock.

Should Investors Follow Suit?About the AuthorRobert "Izzy" Izquierdo is a contributing Motley Fool stock market analyst covering information technology, consumer discretionary, consumer staples, and communication services sectors. Prior to The Motley Fool, Izzy was head of product management at Target Media Partners, developing and launching multimillion-dollar software used by businesses such as Charter Communications. Prior to that, he worked at Yahoo! and startups on software products in connected TV, AI, consumer apps, and digital advertising. He holds a bachelor’s degree in English literature from UCLA and is certified in software product management.TMFWryWriteStocks MentionedServiceNowNYSE: NOW$109.30 (+4.86%) $+5.07OktaNASDAQ: OKTA$75.25 (+3.08%) $+2.25*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.