Citi names non-Mag 7 software stocks worth buying amidst AI-driven rout

US software stocks have been caught in a violent downdraft since the start of 2026, with the iShares Expanded Tech-Software Sector ETF (ticker symbol IGV) crashing more than 20% year-to-date. Investors are worried that generative artificial intelligence (AI) agents – like Anthropic’s recently expanded Claude Cowork – will dismantle the traditional Software-as-a-Service (SaaS) economic engine. Still, Citi’s senior analyst Drew Pettit suggests this panic has created a rare “de-risked” entry point, adding that fundamental strength will eventually trump the current AI-phobia atmosphere. After filtering for companies with falling share prices whose earnings estimates rose, he believes the following three are particularly well-positioned to recover as the year unfolds. AppLovin Corp (NASDAQ: APP) Citi maintains a “buy” rating on AppLovin stock…