With giants like Microsoft (NASDAQ:MSFT), Workday (NASDAQ:WDAY), and Intuit (NASDAQ:INTU) positioned to lead the tech rebound, Barclays expects 2025 to represent a turn-around for the software industry.
As drivers of this increase, analysts cite a more steady economy, more IT spending, and declining interest rates. Though lagging behind hardware and data center spending in 2024, artificial intelligence-powered software is expected to take off. With its Azure platform and M365 Copilot products, which could potentially boost sales and restore interest, Microsoft stands out.
Using generative artificial intelligence in its tax and accounting solutions to boost profitability, Intuit is expected to gain from developments in the small and medium business sectors. Workday is likely to see more demand for back-office software and better profits in the meantime.
Noting that its new products and gen-AI capabilities might propel expansion, Barclays also upgraded Snowflake (NYSE:SNOW) to Overweight. An economic rebound would give Snowflake's consumption-based company model more impetus and support.
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