When Anthropic launched its Claude Cowork AI plugins earlier this year, some investors feared the tools would disrupt major software vendors and consulting firms by automating tasks that once required human expertise or multiple software licenses. But new research from Macquarie, Bloomberg Intelligence, and Morgan Stanley suggests the core subscription model is holding steady—even as enterprise tech budgets undergo a significant reallocation.
Steady ARR, Shifting Priorities
Macquarie, an Australian investment bank, reported that annual recurring revenue (ARR) trends across its growth-software coverage remain “on solid ground.” Many companies posted ARR growth in March and April that matched recent quarters, and more than half saw faster year-over-year ARR gains. ARR is a key metric for subscription-based software firms, representing the annualized value of recurring contracts.
But the word “steady” masks a deeper shift. Seat-based businesses—those that charge per user—depend on customers adding new employees or expanding usage. Services-heavy firms rely on clients approving new projects and consulting engagements. Both models are now feeling pressure as companies prioritize AI investments over other spending.
Flat Budgets, AI as a Must-Have
Bloomberg Intelligence and Morgan Stanley argue that overall IT budgets are roughly flat, while AI has become a mandatory line item. That means money for new licenses, extra seats, and consulting hours gets squeezed. This dynamic helps explain why growth has cooled at companies like Workday, a human resources software provider, and Accenture, a global consulting giant, even as subscriptions continue to renew.
Morgan Stanley’s CIO survey showed services budgets rising just 2% year over year in 2026—a tepid pace that underscores the challenge. When AI pilots and infrastructure get priority funding, the easiest items to postpone are discretionary: new seats, fresh module rollouts, and consulting engagements. That can slow net expansion—the extra revenue from existing customers growing their spend—even if ARR doesn’t fall.
What It Means for Investors
For everyday investors, the key takeaway is that “resilience” in software and consulting stocks may look different in this environment. The risk for seat-driven vendors like Workday and services-heavy firms like Accenture is less about abrupt customer churn and more about a longer stretch of slower growth. That can keep pressure on revenue expectations and valuation multiples, especially for smaller vendors with less pricing power.
This trend also ties into broader market shifts. For instance, AI enthusiasm has shifted to chipmakers as software firms face rising debt costs, and recent IPOs like Bending Spoons test investor appetite for software deals. Meanwhile, FactSet’s steady forecast highlights the cautious mood across the sector.
The Bottom Line
AI plugins didn’t break big software, but they are reshaping how companies allocate their tech dollars. Investors should watch for signs of slowing net expansion at seat-based and consulting-heavy firms, as flat budgets and AI’s priority status create a headwind that may persist for quarters. The core subscription model remains intact, but the path to growth is narrowing.
