These stocks could be the future winners - and losers - of a massive shift in IT spending

By Hannah Pedone

As more money flows toward AI software offerings, Salesforce could deepen its customer relationships while Adobe looks vulnerable, analysts say

On Monday, BofA analyst Tal Liani upgraded shares of Salesforce to buy from underperform.

Corporate IT teams are shifting money away from traditional software and toward artificial-intelligence products, and some software companies look better positioned than others to withstand this transition.

New data from a Wells Fargo survey of 100 chief information officers shows that 3 out of every 5 companies are planning to reallocate at least a midsingle-digit portion of their of their information-technology budget towards AI in the near term.

On the back of that survey, Wells Fargo analyst Michael Turrin downgraded shares of Adobe (ADBE) to underweight, the rough equivalent of sell, from overweight, and lowered his price target to $225 from $270. He wrote that companies focused on front-office tools - meaning more customer-facing and office-focused software offerings - are expected to see the biggest hit from budget reallocations. He listed Adobe, Zoom Communications (ZM) and DocuSign (DOCU) as examples of vulnerable players.

Meanwhile, he's more optimistic about infrastructure software players, including the large cloud companies that provide computing power - with the idea being that Microsoft (MSFT) and Amazon Web Services (AMZN) could be spared from the disruption.

As for software companies with major systems of record, like Salesforce (CRM) and SAP (SAP), outcomes from the survey data were more polarized. For instance, 14 CIOs pegged Salesforce as a top-five winner from AI, while 24 ranked it a top-five loser.

Yet for BofA analyst Tal Liani, Salesforce's fate in the AI era is more decisively upbeat. On Monday, he upgraded the stock to buy from underperform and raised his price target to $285 from $160, saying that large enterprises are unlikely to replace platforms like Salesforce that house large amounts of data. AI is actually more likely to deepen dependence on those platforms, he wrote.

While smaller companies may be able to vibe code software for isolated use cases, companies that have major enterprise-scale data, cybersecurity needs and more complex workflows will continue to rely on Salesforce, Liani said.

He pointed to Salesforce's cloud platforms that companies rely on to house their data and workflows, as well as the fact that Salesforce is integrating agentic AI into its customer-relationship management platform through Agentforce, the company's own autonomous AI offering.

See also: The murky AI milestone that has some of the industry's leading voices increasingly on edge

Shares of Salesforce were up 1.9% on Monday, while shares of Adobe were down 1.8%.

-Hannah Pedone

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10-12-26 1247ET