April 23 - Bank of America (NYSE:BAC) analysts named Microsoft (NASDAQ:MSFT) and Salesforce (NYSE:CRM) as top software bets across both stable and uncertain economic climates, citing strong fundamentals and broad enterprise integration, according to a Wednesday note.
Led by Brad Sills, the team said stocks with predictable business models, such as subscriptions, and those tied to stable end-markets like insurance or large enterprises, are better positioned if macro conditions remain challenging. Companies generating solid free cash flow and serving as platform vendors were also favored.
In a prolonged risk-off environment, BofA prefers software players like Intuit (NASDAQ:INTU), Oracle (NYSE:ORCL), Workday (NASDAQ:WDAY), CCC Intelligent Solutions (NASDAQ:CCCS), and Alarm.com (NASDAQ:ALRM) alongside Microsoft and Salesforce. Meanwhile, in a recovery, analysts favor names more exposed to small- and medium-sized business (SMB) and consumer spending, including HubSpot (NYSE:HUBS), ServiceNow (NYSE:NOW), Shopify (SHOP), Datadog (NASDAQ:DDOG), Monday.com (NASDAQ:MNDY), and Five9 (NASDAQ:FIVN).
BofA trimmed its constant-currency Q2 calendar 2025 revenue growth estimates for the sector by 1% to 4%, reflecting persistent uncertainty. However, the bank characterized demand trends as mixed, not negative.
The analysis included metrics like operating margins and sales efficiency, helping investors assess risk across various business and customer models.
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