BofA analysts told investors in a research note Tuesday that software vendors such as Microsoft (NASDAQ:MSFT), Oracle (NYSE:ORCL), and Salesforce (NYSE:CRM) have key components that will bode well in the race for artificial intelligence (AI) leadership.
In the note assessing the AI landscape, the analysts said the most notable factors expected to contribute to AI success are access to high volumes of quality data — which, they said, favors large incumbent software vendors like MSFT, ORCL, and CRM — market-leading install bases for ongoing data acquisition, and highly specialized solutions embedded within enterprises.
"MSFT ranks most favorably based on our framework, followed ORCL, CRM, and HUBS," they wrote. "Our system also identifies DDOG, WDAY, NOW, CCCS, VEEV, and SHOP as likely AI beneficiaries."
The analysts also revealed that recent investor conversations suggest that, for many stocks in the firm's coverage, "previously underwritten assumptions for a wide variety of factors – competitive moat/sustainable growth potential/pricing power/TAM – are being thoroughly reevaluated."
"AI/gen AI is already moving markets, with stocks re-rating higher and lower on both tangible evidence and convincingly told stories," they added.