Top infrastructure software stocks ahead of earnings: BofA Securities
BofA Securities identifies infrastructure software as an attractive sector, highlighting Datadog (DDOG) and Atlassian (TEAM) as top picks. The firm expects AI to drive growth and raised price targets for both. DDOG's security offerings crossed $100M in annual recurring revenue, while TEAM's Cloud revenue growth is a key metric. BofA maintains Buy ratings for both, with new price targets of $335 for DDOG and $252 for TEAM.
How this was made
The 30-second read
Why it matters
The raised targets for DDOG and TEAM suggest a bullish view on AI‑driven growth, while the lowered target for PATH indicates relative weakness.
Market read
Analyst target revisions provide fresh guidance that can influence short‑term trading decisions in the infrastructure‑software space.
What to watch
Potential slowdown in enterprise IT spending and macro‑economic headwinds could limit upside.
Background
BofA Securities released an infrastructure‑software outlook ahead of Q3 earnings, updating price targets for several companies.
Ticker impact
BofA raised Datadog's price objective to $335, citing faster‑growing observability market and security revenue exceeding $100 M ARR.
likely upward pressure as market prices in the higher target.
The new $335 target reflects stronger AI‑driven demand and security growth, which could attract buying.
BofA lifted Atlassian's price objective to $252 from $210, emphasizing AI‑driven cloud revenue growth and long‑term rerating potential.
likely upward pressure as investors re‑rate the stock.
The higher target is based on expected cloud revenue acceleration and AI tailwinds.
BofA lowered its price objective for UiPath (PATH) while raising targets for peers, indicating a relative weakness.
likely downward pressure as the lowered target signals weaker outlook.
A reduced target suggests concerns about PATH's growth relative to peers.
Market effects
Infrastructure software may see broader rerating as AI demand is highlighted.
U.S. tech sector could benefit from heightened AI focus.
Global investors tracking AI‑enabled software may adjust exposure.
Counterpoint
Price targets may be overly optimistic given high current valuations and competitive pressure.
Key entities
- Research FirmBofA Securities
Provider of the price‑target updates and sector outlook.
- CompanyDatadog
Observability platform with growing security revenue.
- CompanyAtlassian
Collaboration software benefiting from AI tailwinds.
- CompanyUiPath
Robotic process automation firm with a reduced target.
