Bank of America Raises Target Price for 10 Software Stocks: AI Impact Concerns Ease, Sector Undergoes Valuation Restructuring
Bank of America has raised target prices for several software company stocks.
According to Equities News APP, Bank of America analysts led by Tal Liani released a research report on Wednesday, significantly raising the target prices of 10 software stocks including ServiceNow (NOW.US), Figma (FIG.US), and Snowflake (SNOW.US). The rationale given is the overall expansion in the valuation multiples of the software industry and the ongoing easing of market concerns regarding AI's disruptive impact.
Meanwhile, news of OpenAI's revenue growth slowdown further helped alleviate market fears of “AI disrupting the software industry,” leading to a broad rally in software stocks—ServiceNow surged by 6.5% at Wednesday’s close, Figma, Workday, and Adobe gained between 3% and 4%, and the iShares Expanded Tech-Software Sector ETF (IGV) closed up 1%.
Target Price Adjustments: Maximum Increase Up to 46%
This round of Bank of America's target price adjustments covers three major segments: infrastructure software, large software, and application software:

Among them, Workday’s target price saw the most notable hike—soaring from $140 to $205, a 46% increase. Snowflake’s target price was raised to $395, the highest absolute price among all covered stocks.
Upgrade Logic: Multiple Expansion and Fading AI Concerns
In the report, Tal Liani specifically stated that this adjustment “reflects the expansion of valuation multiples across the software industry; our views on valuation and fundamentals remain unchanged.”
The analysts attributed the recent strong performance of software stocks to three main factors: robust profits and accelerating growth among some infrastructure software firms, renewed recognition of valuations in large and application software companies as they recover from depressed states, and diminishing concerns about AI’s disruption, which has further boosted investor sentiment.
Benchmark analyst Yi Fu Lee further pointed out that there is a fundamental shift happening in market sentiment: “The market is beginning to build stronger confidence in fundamental improvements and is increasingly recognizing that software is becoming a beneficiary of enterprise AI deployment, not a victim of AI disruption.”
OpenAI’s growth slowdown also acted as a catalyst. Reportedly, OpenAI’s Q2 revenue grew 18% quarter-on-quarter to $6.7 billion, but operational losses widened from $9.3 billion to $12.3 billion. Raymond James analyst Adam Tindle commented that the deceleration in OpenAI’s growth “reduces the perceived existential threat of AI potentially killing the software-as-a-service (SaaS) business.”
Stock Rating Logic: Divergence from “Buy” to “Underperform”
Among large software stocks, ServiceNow and Figma received “Buy” ratings. Liani believes ServiceNow, with its historical data and background in enterprise workflows, holds a clear advantage in implementing agent-based AI solutions. ServiceNow’s deep understanding of customer operations will translate into sustained revenue growth and free cash flow expansion.
Workday is maintained at “Neutral” and Adobe at “Underperform.” According to analysts, the recent rapid appreciation in these two stocks has already outpaced signs of an inflection point in fundamental growth. This judgment reveals a divergence within the software sector: companies with a clear AI monetization path are being re-rated, while those that rise merely on sector sentiment repair may face a ceiling.
In infrastructure software, Snowflake is rated “Buy” for its ongoing robust growth and AI monetization potential. GitLab and Amplitude remain “Neutral.”
In application software, Box, Asana, and Zeta are rated “Buy” for their sustainable growth prospects and emerging AI monetization opportunities.
Bank of America’s across-the-board target price increases for software stocks represent the latest sign of continued recovery in the software sector following the AI panic sell-off in the first half of the year. As the “AI will kill software” narrative gradually fades, investors are refocusing on companies capable of translating AI into real revenue growth.
As Benchmark analysts stated, the market is now “rewarding companies that can show tangible evidence of AI adoption, customer spending, and monetization.” Following ServiceNow’s better-than-expected Q2 report and raised subscription revenue guidance in late July, it has become the best annotation of this logic. This round of target price hikes from Bank of America provides further Wall Street endorsement of this trend.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
Major Reversal! Political Stability and Fiscal Improvement Become Key Attractions as Bond Investors "Abandon France for Italy"
As the market prepares for next year's elections in Italy and France, an increasing number of bond investors are betting that political turmoil in Italy will be calmer than in France.

Dow Jones futures gain on Treasury bond buyback relief
Target stock hits 52-week high at $159, but overbought RSI signals pullback risk

Meta stock sinks 3.8% as bearish trend meets fading momentum

