Oppenheimer sees AI software winners as focus shifts to ROI

Oppenheimer analysts assert that the Artificial Intelligence (AI) transition has shifted from experimentation to a focus on Return on Investment (ROI). Enterprises are now spending on AI with the expectation of measurable business outcomes, rather than just adoption metrics. This is being reflected in CFOs evaluating AI investments alongside labor costs, demanding clear returns on their AI expenditures.

AI spending is becoming more disciplined, with value creation moving up the IT stack. Investors are scrutinizing software vendors' ability to convert AI adoption into sustained growth and attractive returns.

Microsoft, Oracle, Salesforce, and ServiceNow are highlighted as having established multi-billion dollar AI businesses. Microsoft is a top pick for Oppenheimer, citing accelerating platform demand, disciplined capital allocation, and unmatched distribution across a large installed base. ServiceNow also receives favorable treatment, praised for its strong growth, cash flow generation, and exposure to durable automation and security tailwinds.

Braze is identified as having an attractive risk-reward profile, as a system-of-record for customer engagement and profitable growth.

However, Figma is recommended for avoidance, as growth may moderate due to pricing actions and premium multiples mean upside relies on sustaining outperformance. SoundHound AI is also flagged, citing unclear profitability inflection amid mature and competitive end markets, reliance on acquisitions to support guidance, and elevated stock-based compensation.