Company Interview / Jai thinks these stocks still win in an AI world

Key points:

AI disruption and budget reallocation seen as driving the recent software sell-off Australian leaders Xero, WiseTech Global, Technology One and Pro Medicus highlighted as well positioned Preference stated for selective stock-picking over broad software ETFs due to disruption risk

Jai Mirchandani of Elm Responsible Investments states that the recent sell-off in global software is driven by two intertwined fears: AI disruption and budget reallocation. In his view, investors are overly focused on the risk that AI agents will replace human “seats” in traditional subscription models, and that enterprise IT budgets will be diverted towards large language models. Mirchandani argues this pressure is overstated for high‑quality platforms that are deeply embedded in customer workflows and rich in proprietary data.

He points to ServiceNow (NYSE:NOW) as an example, highlighting its strong subscription growth, upgraded guidance and rapid scaling of AI-specific products. Mirchandani expects similarly positioned Australian names to navigate the shift successfully, citing Xero (ASX:XRO), WiseTech Global (ASX:WTC), Technology One (ASX:TNE) and Pro Medicus (ASX:PME). He notes these companies are already evolving from seat-based pricing to transaction or API-based models, enabling them to monetise AI-driven usage rather than be undermined by it.

Looking ahead to Xero’s upcoming result, Mirchandani is focused on the pace and visibility of AI-linked revenue growth and any evidence of seat compression. He views broad software ETFs as less attractive in this environment, preferring selective exposure to data-rich, deeply integrated platforms.