These Experts Say These 3 Software Stocks Are ‘AI Winners’

Key Takeaways

• Oppenheimer analysts said software stocks could be set to get a boost from AI-driven revenue growth.

• They identified Microsoft, ServiceNow, and Braze as top picks.

Oppenheimer has ideas about how to play an expected wave of fresh support for software stocks.  

Evidence that software companies are driving revenue gains from AI could ease disruption fears, leaving the sector primed for a boost, Oppenheimer analysts wrote Monday—though they see some stocks as bigger “AI winners” than others.

Companies that can claim they serve as a “system of record” for their enterprise clients’ data, and have pricing models that combine seats with charges for rising consumption offer the “clearest path to AI-driven upside and stock outperformance,” the firm wrote. 

Cloud giant Microsoft (MSFT), workflow automation software provider ServiceNow (NOW), and customer engagement platform Braze (BRZE) were Oppenheimer’s top three picks based on that criteria. 

Microsoft offers “unmatched distribution across a massive installed-base,” while ServiceNow combines “best-in-class growth” with “durable automation and security tailwinds,” according to the analysts. Braze, which has seen its stock lose nearly a third of its value this year, offers “one of the most attractive risk/rewards in our universe,” Oppenheimer wrote.  

Shares of ServiceNow have lost about 15% year-to-date, while Microsoft has climbed around 6%, underperforming the broader S&P 500’s roughly 13% gain over the same period. 

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