Agent-based AI will become a "new growth point" for US software stocks, Bank of America strongly recommends Salesforce, Microsoft, and others

Zhitong
2025.01.14 13:47
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Bank of America has listed Salesforce, HubSpot, Microsoft, and ServiceNow as its top picks in the software sector for 2025, believing that agent-based artificial intelligence will become a new growth point for software companies. Analysts pointed out that although the software industry saw stock price increases in 2023 and 2024, revenue multiples and growth expectations remain below historical levels, indicating that the market has not fully reflected the potential of agent-based artificial intelligence. Other recommended enterprise software companies include Datadog and Gitlab

According to Zhitong Finance APP, Bank of America has listed Salesforce (CRM.US), HubSpot (HUBS.US), Microsoft (MSFT.US), and ServiceNow (NOW.US) as its top picks in the software sector for 2025.

Bank of America analysts stated, "After rising 59% and 23% in 2023 and 2024 respectively, the stock prices in the U.S. software industry are not cheap. However, the revenue multiples and growth expectations are still below the 5-year median and pre-COVID levels, indicating that the rise of Agentic AI, changes in enterprise IT spending, and the ongoing migration to the cloud have not yet been fully reflected in prices."

The analysts added that Agentic AI is likely to be the "next growth point" for software companies, as some software has already "demonstrated PhD-level intelligence on certain tasks, potentially replacing workers as early as the second half of 2025."

Therefore, the analysts believe that Salesforce has become a "leader" in the front-end Agentic AI space, while HubSpot is accelerating growth driven by improvements in small and medium-sized business operations, providing investors with opportunities to enter the Agentic AI field.

In the development of artificial intelligence, Microsoft holds a very advantageous position in infrastructure and applications, while ServiceNow achieves "top-tier growth in the industry" with its leading back-office systems and cloud/AI platform.

Bank of America also listed several other enterprise software companies worth considering for investors, including Datadog (DDOG.US), whose observability platform drives growth and free cash flow.

GitLab (GTLB.US) is steadily increasing its market share in the DevOps space and achieving higher profits through artificial intelligence, while Global-E Online (GLBE.US) is gradually becoming a standard-bearer in the cross-border e-commerce market.

Bank of America analysts further noted that Five9 (FIVN.US) is approaching a low point in earnings expectations, and its end market is improving, making its valuation quite attractive.

Israel-based monday.com (MNDY.US) has a revenue growth rate of 20% or more, while Asana (ASAN.US) has reached an inflection point in key metrics, with performance expectations likely to be revised upward

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