Here’s Why Berenberg Sees More Upside on Autodesk Stock Despite Key AI Headwinds

Berenberg maintains a buy rating on Autodesk Inc. stock despite noting AI headwinds in the market. The research firm credits the stock's robust second-quarter performance, which exceeded expectations, as a key driver of its confidence in the company's long-term potential. Autodesk's revenue grew by 16% year over year to $2.05 billion, while billings increased by 10% to $1.85 billion.

Profitability has also improved, with non-GAAP operating margin reaching 41% and earnings per share at $3.30, surpassing Wall Street's forecasted $3.12. The company's substantial free cash flow, which rose by 24% to $561 million, further highlights its financial strength. Autodesk's remaining performance obligations also grew by 12% to $5.25 billion, providing additional visibility into future revenue.

However, the firm points out that the company faces increased competition from AI-native design tools and cloud-native engineering platforms. While revenue has increased, billings growth has lagged behind, suggesting less momentum in new bookings and potential future demand. Despite this, Autodesk's stock remains attractive due to its large recurring subscription base, expanding margins, and significant exposure to industries like construction, engineering, manufacturing, and infrastructure.