Tesla and AMD among market cap stock movers on Friday

Investing.com -- Unity Software (NYSE:U) stock tumbled 12% Friday, while Take-Two Interactive Software (NASDAQ:TTWO) fell 7% and Roblox Corporation (NYSE:RBLX) dropped 8% following Google’s announcement of Project Genie, a new AI-powered world creation tool.

The gaming and interactive software companies saw their shares decline as Google, a unit of Alphabet (NASDAQ:GOOGL), unveiled its experimental prototype that allows users to create, explore, and remix interactive virtual worlds. The new offering appears to have sparked investor concerns about potential competition for established game development platforms.

Project Genie, which is rolling out to Google AI Ultra subscribers in the U.S., leverages the company’s Genie 3 world model to generate dynamic, interactive environments in real time. The tool enables users to create customizable worlds through text prompts and images, with features including "World Sketching," exploration capabilities, and remixing options.

The prototype represents Google’s push into immersive content creation, potentially challenging companies like Unity, which provides tools for game developers, and platforms like Roblox, which offers user-generated gaming experiences. Take-Two, known for franchises like Grand Theft Auto, could also face competitive pressure from simplified content creation tools.

Google described Project Genie as part of its broader artificial general intelligence (AGI) mission, noting that the technology simulates physics and interactions for dynamic environments while maintaining consistency across various scenarios.

While the company acknowledged several limitations of the current prototype, including imperfect visual rendering and occasional control issues, the technology signals Google’s ambitions in the interactive content creation space that has traditionally been dominated by specialized gaming and development platforms.

Investing.com -- After a challenging 2025 where artificial intelligence concerns weighed heavily on application software stocks, 2026 offers potential for improved sentiment as AI-related risks appear less significant than initially feared. Morgan Stanley has identified several standout performers poised to benefit from this shifting landscape.

While broad upward estimate revisions remain limited, selective opportunities exist within the sector. Here are the top application software companies positioned for success in 2026:

HubSpot

Despite maintaining high-teens growth throughout 2025, HubSpot Inc (NYSE:HUBS) experienced significant multiple compression, with shares down 55% on a next-twelve-months basis. As one of the few established platform plays serving SMBs, HubSpot’s value proposition becomes increasingly important for customer retention as businesses seek to extract value from AI insights across the front office.

Upmarket momentum and multi-hub consolidation provide long runways for growth, while credit consumption is emerging as a potential upside driver based on strong AI product engagement. Trading at approximately 4.5x EV/Sales, HubSpot offers compelling value compared to broader SaaS at 5.5x.

HubSpot has seen several analyst actions, with Stifel and BMO Capital lowering their price targets, citing software multiple compression and SMB concerns, respectively. In contrast, Citi reiterated its Buy rating and opened a 30-day upside catalyst watch on the company.

Klaviyo

Shares compressed roughly 40% on an EV/NTM Sales basis during 2025 amid concerns about growth durability and potential pressure from ’agentic commerce.’ However, Klaviyo Inc (NYSE:KVYO) is entering an emerging platform status with its Service offering, a suite of tools specifically built for direct-to-consumer brands—a historically underinvested niche.

Management suggests full adoption of the expanded portfolio could drive a 2-3x ARPU uplift, positioning Klaviyo for estimate upside while maintaining best-in-class growth of at least 21-22% in 2026.

In recent news, Klaviyo reported that its customers generated a record $3.8 billion in Klaviyo Attributed Value during the Black Friday weekend, a 27% year-over-year increase. The company also appointed Chano Fernandez as co-CEO to share leadership responsibilities with co-founder Andrew Bialecki.

Wix

Despite delivering accelerated revenue growth against tough price-benefitted comparables, Wix.Com Ltd (NASDAQ:WIX) saw its EV/NTM FCF multiple compress by over 50% through 2025.

Multiple catalysts for 2026 include Base44 becoming a more material driver to the model, with management setting a floor for blended business profitability at mid-20s FCF margin, and the launch of a new Self-Creators product to re-engage growth in Wix’s largest customer segment.

Trading at approximately 6x EV/CY27 FCF, improved execution could attract investors back to this stable core business.

Wix.com announced its Board of Directors has authorized a $2 billion share and convertible note repurchase program for fiscal years 2026-2027. The company also launched Wix Harmony, a new AI-powered website builder.

Amplitude

Upgraded to Overweight from Equal-weight, Amplitude Inc (NASDAQ:AMPL) stands to benefit from capturing increased digital product user behavior data as GenAI accelerates development of mobile and web applications.

The company has worked through optimization headwinds from Covid-era contracts while experiencing tailwinds from broader digital product development. Multi-product adoption presents a long runway for growth, with Agents offering an opportunity to better tie the portfolio together.

A recent development saw Amplitude report that its annual recurring revenue (ARR) showed 15.8% year-over-year organic growth in its latest quarter. The company also announced the acquisition of InfiniGrow, an AI marketing analytics company, to enhance its platform’s capabilities.

BlackLine

Named as the Back Office Top Pick, Blackline Inc (NASDAQ:BL) shows strong probability of positive estimate revisions and accelerating growth following three years of strategic changes.

Q3 results demonstrated strength with new customer bookings up 45% year-over-year and average new deal size up 111%. Management now expects gross bookings growth of 15% in Q4 and 20% in FY26, with constant currency ARR projected to accelerate from 7% to 10-11% by Q4 2026.

BlackLine acquired WiseLayer, a company specializing in AI-powered agents for finance and accounting, to integrate into its platform. Separately, activist investor Engaged Capital announced its intention to nominate four director candidates to the company’s board.

Descartes

With trough shipping volumes likely in the past, organic growth is expected to accelerate into FY27/CY26 as Descartes (NASDAQ:DSGX) continues gaining market share, laps easy year-over-year comparisons, and benefits from a professional services refresh cycle.

Following a recent 7% workforce reduction, increasing operating leverage should drive accelerating adjusted EBITDA growth to 15%+ and EPS growth to 20%+.

Navan

Positioned as an AI beneficiary, Navan Inc (NASDAQ:NAVN) is leveraging technology to accelerate growth by automating customer service and travel agent functions, leading to market share gains.

With proprietary travel content and data creating a defensible moat, the company offers an attractive opportunity at 4x CY27 Sales, below peers at 5x, while maintaining 20%+ growth.

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