Here’s Why NZS Capital Sees Tyler Technologies (TYL) as Resilient to AI Concerns

In its first-quarter 2026 capitalist letter, NZS Capital highlighted stocks similar Tyler Technologies, Inc. (NYSE:TYL). Tyler Technologies, Inc. (NYSE:TYL) is simply a starring integrated bundle and exertion solutions supplier for the nationalist assemblage successful the United States. On June 18, 2026, Tyler Technologies, Inc. (NYSE:TYL) closed astatine $276.88 per share. One-month instrumentality of Tyler Technologies, Inc. (NYSE:TYL) was -11.61%, and its shares mislaid 51.41% implicit the past 52 weeks. Tyler Technologies, Inc. (NYSE:TYL) has a marketplace capitalization of $11.39 billion.

NZS Capital stated the pursuing regarding Tyler Technologies, Inc. (NYSE:TYL) successful its Q1 2026 capitalist letter:

"New additions to the portfolio extracurricular of healthcare see optionality positions successful Tyler Technologies, Inc. (NYSE:TYL) and Sabre Corp. Tyler Technologies, which we added successful the quarter, provides bundle for authorities administrative purposes, including nationalist administration, spot appraisal, taxation assessment, tribunal management, and nationalist safety. We'd reason that Tyler's bundle acts arsenic ngo captious SoR whose worth is overmuch much than conscionable the code; yet, their merchandise usually represents lone a fraction of a percent of a customer's operating budget. Even mounting speech the risk-averse quality of municipal authorities customers, specified precocious levels of NZS look rather improbable to beryllium internally vibe coded oregon ripped and replaced for an "AI-native" startup with nary way record. Despite this affirmative outlook, Tyler's banal has fallen >40% successful the past year. Ultimately, we deliberation the astir apt result is that AI agents volition interact with the existing high-NZS SoR alternatively than regenerate them. That brings america to the second, and successful our sentiment overmuch bigger, hazard to bundle from AI. We deliberation AI is overmuch much focused connected generating ROI done the elimination of labour than displacing existing bundle platforms. Given that we judge the hazard to labour from AI is simply a credible (if not likely) concern, we've positioned our bundle vulnerability accordingly. Roughly 70% of our bundle holdings are chiefly vertical marketplace software, i.e., companies servicing a circumstantial vertical alternatively than wide enterprises; we judge the spot hazard is importantly little successful vertical marketplace bundle businesses."