Where you want to invest in tech for the second half, according to one top analyst

For the second half of 2026, look to the data layer. That's the segment of the software stack that's above storage and below applications, where data is cleaned, formatted and organized so that it can be used by artificial intelligence. And it's where top analyst Heath Terry, head of AI investment research at Citigroup, thinks the next crop of winning companies will emerge in the AI race. "The companies that are winners are the ones that are exposed to consumption. AI is driving massive growth in consumption, particularly at the data layer. The Snowflake s, the MongoDB s, the Datadog s, even companies like Elastic that have exposure to consumption-driven business models – that's where you want to be," Terry said on CNBC's " Squawk on the Street " Tuesday. At the level of AI applications themselves, frontier models like Anthropic and OpenAI are jockeying for position ahead of expected public offerings, and both are up against a host of open source models that have much the same overall capability at a fraction of the cost. But all of these models need access to increasing volumes of maneuverable data, and software companies that can deliver on that demand will be a crucial cog in the system. Investor confidence in that demand is creating a more nuanced and positive view of the software sector as a whole after its across-the-board devaluation earlier this year, informally termed Saas-mageddon. …