The Market Is Wrong About Claude Mythos: Buy Software, Buy It All

Julian LinInvesting Group LeaderFollow5ShareSavePlay(8min)CommentsSummarySoftware stocks are trading at historically low valuations due to AI-driven fears, creating a compelling contrarian buying opportunity.AI models like Anthropic’s Claude Mythos have heightened concerns about disruption, but the market may be overestimating risks to incumbents.Despite seat displacement risks, high gross margins (75%-90%) and strong net cash positions suggest software companies can benefit from AI-driven margin expansion.Cybersecurity, data, and legacy names offer deep value, with CRM highlighted as a core holding amid extreme market pessimism.Looking for a portfolio of ideas like this one? Members of Best Of Breed Growth Stocks get exclusive access to our subscriber-only portfolios. Learn More » WANAN YOSSINGKUM/iStock via Getty Images Anthropic’s (ANTHRO) newest model in Claude Mythos appears to have been the last straw. Software stocks (IGV) are being beaten down across the board, trading at valuations that I never thought possible. WhileThis article was written byJulian Lin37.46K FollowersFollowJulian Lin is a financial analyst. He finds undervalued companies with secular growth that appreciate over time. His approach is to look for companies with strong balance sheets and management teams in sectors with long growth runways. Julian is the leader of the investing group Best Of Breed Growth Stocks where he only shares positions in stocks which have a large probability of delivering large alpha relative to the S&P 500. He also combines growth-oriented principles with strict valuation hurdles to add an additional layer to the conventional margin of safety. Features include: exclusive access to Julian's highest conviction picks, full stock research reports, real-time trade alerts, macro market analysis, individual industry reports, a filtered watchlist, and community chat with access to Julian 24/7. Learn more.Analyst’s Disclosure: I/we have a beneficial long position in the shares of CRM, ADBE, MSFT, ZS, SNOW, MNDY either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.