AI is shaking software. There's a new way to spot which companies are built to survive.

Recent events have highlighted the fragility of some software companies, as acquisitions and disappointing guidance have occurred. To determine which firms are more likely to survive industry upheavals, Barclays strategists analyzed five past technological shifts, including digital advertising, streaming, smartphones, online shopping, and shale gas.

Instead of focusing on growth rates or spending power, the winners from these past upheavals shared four common traits: strong profit margins, consistent cash generation, low debt levels, and high employee productivity. These characteristics allow a company to better adapt when its industry undergoes sudden changes. While discussions about AI often revolve around the development of smart models and impressive product demos, Barclays believes that financial strength and operational discipline might be more crucial when an entire sector faces challenges.

By applying these criteria, Barclays has identified a "Resilient Software" basket, which includes companies like AppLovin, Freshworks, and InterDigital among broader software firms, and Datadog, Veeva Systems, and Zscaler among those Barclays already rates positively. Microsoft, Intuit, PTC, Autodesk, Salesforce, Palo Alto Networks, and ServiceNow also made the list.

Although no screen can accurately predict who will emerge victorious in the AI era, this framework provides a fresh perspective on the software industry. The companies most likely to survive may not be those racing fastest; rather, they may possess the strongest balance sheets and the greatest flexibility to adapt as AI transforms the landscape.