This analysis delves into strategic investment decisions made in the initial quarter of 2026, focusing on key software enterprises. The objective was to capitalize on market downturns and prevalent concerns regarding artificial intelligence's transformative effects, thereby acquiring robust businesses with sustained revenue streams at attractive price points. The insights presented here were initially disseminated within The Nightview Fund's Q1 2026 Investor Letter.

Over recent months, a significant discourse has emerged concerning the viability and structure of business models within the artificial intelligence sector. This debate has triggered market fluctuations, presenting both challenges and opportunities for investors. For instance, Axon, a company specializing in public safety technology, experienced a notable stock correction. This downturn, part of a broader software market sell-off, provided an opportune moment for the fund to establish its position in late February. The underlying thesis was that despite short-term volatility, Axon's fundamental value and long-term growth prospects remained intact, especially given its innovative solutions that enhance public safety and operational efficiency.

Similarly, ServiceNow, a leading digital workflow company, saw its stock decline by over 20% from its peak in mid-March. This correction was primarily driven by apprehensions that advancements in AI might empower customers to develop their own workflow automation tools, potentially eroding ServiceNow's market share. However, the fund viewed this dip as a strategic entry point, recognizing ServiceNow's entrenched position in enterprise workflows and its continuous innovation in integrating AI to augment its offerings, rather than be supplanted by it. The belief was that AI would ultimately enhance the value proposition of ServiceNow's platform, reinforcing customer loyalty and expanding its addressable market.

Shopify, a prominent e-commerce platform, was also added to the portfolio in mid-March. This addition was predicated on its classification as a long-term compounder, a business capable of sustained growth over extended periods. Despite broader market uncertainties, Shopify's robust ecosystem, continuous platform enhancements, and increasing adoption by merchants worldwide underscored its resilient business model. The investment strategy here emphasized the potential for compounding returns driven by the secular growth of e-commerce and Shopify's pivotal role within it.

Finally, Autodesk, a multinational software corporation that makes software products and services for the architecture, engineering, construction, manufacturing, media, education, and entertainment industries, represented another key acquisition. The fund initiated its position in late February when the stock was trading at a considerable discount to its intrinsic value. This undervaluation was attributed to the pervasive weakness observed across the software sector. The investment in Autodesk was based on its critical role in various industries, its transition to a subscription-based model, and the expectation that its innovative software solutions would continue to drive demand and generate long-term value, irrespective of short-term market sentiment.

The strategic acquisitions of Axon, ServiceNow, Shopify, and Autodesk during a period of heightened market fear underscore a fundamental investment philosophy: identifying high-quality, recurring-revenue businesses that are temporarily undervalued due to macro-economic concerns or specific industry-wide anxieties, such as the impact of AI. These investments reflect a conviction in the enduring value of these software leaders and their capacity to adapt and thrive in an evolving technological landscape, ultimately delivering substantial returns over the long term.