Wall Street spent much of 2026 worrying that artificial intelligence could make traditional software obsolete.
Now, something is changing.
BofA Securities raised price targets on 10 software stocks Wednesday, suggesting that fears of AI disruption are easing while select companies are showing stronger growth and early signs of AI monetization.
The interesting part is that BofA did not raise its earnings forecasts. It raised the multiple that investors are willing to pay for those earnings.
That shift could mark an important change in the software trade.
BofA Is Paying More For Software
BofA analysts Tal Liani, Koji Ikeda and Matt Bullock raised price objectives across 10 software stocks:
- ServiceNow Inc. (NYSE:NOW), from $130 to $150
- Figma Inc. (NYSE:FIG), from $30 to $33
- Workday Inc. (NASDAQ:WDAY), from $140 to $205
- Adobe Inc. (NASDAQ:ADBE), from $190 to $220
- Snowflake Inc. (NYSE:SNOW), from $330 to $395
- GitLab Inc. (NASDAQ:GTLB), from $38 to $45
- Amplitude Inc. (NASDAQ:AMPL), from $12 to $14
- Box Inc. (NYSE:BOX), from $37 to $39
- Asana Inc. (NYSE:ASAN), from $9 to $10.75
- Zeta Global Holdings Corp. (NYSE:ZETA), from $29 to $34.
“We remain selective, favoring stronger growth profiles and emerging AI monetization opportunities,” Liani wrote in the note.
AI Is Becoming A Growth Test
That distinction explains why BofA is not bullish on every name equally.
The bank said software’s re-rating reflects strong earnings from selected infrastructure companies, improving sentiment and moderating concerns about AI disruption.
It is now favoring companies with stronger growth and emerging AI monetization opportunities.
ServiceNow fits that profile.
BofA raised its valuation to 23 times estimated 2027 free cash flow from 20 times. Second-quarter current remaining performance obligations grew 21.5%, subscription revenue increased 23% and AI annual contract value surpassed $1 billion.
Figma offers another signal.
Revenue grew 48.2% year over year in the second quarter, while more than 80% of customers with over $10,000 in annual recurring revenue were consuming AI credits weekly.
Snowflake may have the strongest growth argument.
BofA forecasts 22% revenue growth in calendar 2027, compared with 11% for infrastructure software peers. It also expects a 25% free cash flow margin, versus 18% for peers.
These companies give investors something more valuable than an AI story.
They give them evidence.
Adobe Is The Warning
Then there is Adobe Inc.
BofA raised its price objective to $220 from $190.
The rating stayed Underperform.
That is perhaps the most revealing part of the entire call.
BofA still expects Adobe’s revenue growth to slow from 10.5% in fiscal 2025 to 8.8% in fiscal 2027 and 8.7% in fiscal 2028.
AI-first annual recurring revenue remains below 2% of total ARR.
“AI lowers barriers to content creation and increases competition from lower-cost and AI-native alternatives,” Liani said.
According to Benzinga Analyst Ratings data, Adobe has a consensus Neutral rating and an average price target of $280.36, with individual estimates ranging from $190 to $475.
BofA’s raised target still sits roughly 20% below where the stock trades.
The Software Trade Has Changed
The question is no longer simply whether AI will hurt software.
The market is asking which software companies can turn AI into faster growth, higher usage and stronger cash generation.
According to Bank of America, ServiceNow and Snowflake are providing early evidence. Adobe and Workday still have something to prove.
For investors, that distinction may define the next phase of the software rally.
Photo by wee dezign on Shutterstock
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