Evercore recommends Microsoft, ServiceNow, Salesforce and Samsara

Evercore ISI analyst Kirk Materne believes that Salesforce is among the software companies primed become AI winners.

As investors rediscover their interest in chip stocks, they were dumping some major software stocks on Thursday, adding to pressures seen in the sector over the past year.

Yet the software trade isn't "dead" but rather just "bifurcated," one analyst believes.

The iShares Expanded Tech-Software Sector ETF IGV, a proxy for software stocks, is down 12.8% so far this year, even as the sector has clawed back from the lows of the "Saaspocalypse" earlier this spring.

Evercore ISI analyst Kirk Materne wrote in a Thursday note that the software sector is not a monolith, and called out some companies showing especially strong signs of AI-related momentum.

In his view, Samsara $(IOT)$, ServiceNow (NOW), Microsoft $(MSFT)$ and Salesforce (CRM) are four businesses whose shares look poised to move higher.

For Microsoft, which just posted knockout earnings on Wednesday, Materne wrote that "the stars are aligning" for a "catch-up trade" in the second half of the 2026 calendar year. Factors like the acceleration of the company's Azure platform, momentum in Copilot and positive free cash flow should "pull some investors off the sidelines," he said.

Regarding Salesforce, Materne noted that the clearest catalyst for the second half of the year is a reacceleration in subscription revenue. He said that while Salesforce offers "less upside" than ServiceNow and carries more "AI-disintermediation risk" than Microsoft, it's still "compelling." Adoption of Agentforce, Salesforce's AI platform, is still in the "early innings," according to Materne.

Then there's Samsara, which provides AI-powered telematics, tracking and video-based safety products for the trucking and shipping industries. Materne likes the stock because it has an intriguing AI narrative and some technical momentum.

KeyBanc Capital analyst Jason Celino also sees value in Samsara, telling MarketWatch that the company faces minimal competition.

"It was just kind of a good house in kind of a questionable neighborhood over the last year," he said of Samsara, referring to the fact that the company got caught up in a wider software selloff.

Meanwhile, ServiceNow may sit in a separate class from the three other vendors Materne flagged.

"It's kind of independent of all the other software, whether or not it's the stuff you build yourself or buy from other vendors," Bernstein analyst Peter Weed told MarketWatch. He explained that ServiceNow has made it its specialty to lodge itself between a number of different applications and connect separate software platforms, which sets the company up to implement agents across an organization.

"If you need to get a contract in front of a customer, it [not only] needs to touch sales, but it's going to have to touch the pricing system, finance, inventory, delivery, all of these types of things," Weed said.

Yet he noted that some investors have been disappointed by the level of growth sported by ServiceNow and other enterprise software companies, especially relative to the "hockey-stick growth" of other companies in the AI ecosystem.

"ServiceNow can win in AI, but still not get that hockey-stick growth," Weed said, adding that it "will tend to be a much more durable, steady, mid- to high-teens-growth company for a very long time. That's either attractive or unattractive, depending on the type of investor you are."

Shares of Salesforce, Samsara and ServiceNow were down 4.1%, 7.6% and 4.9%, respectively, on Thursday. Shares of Microsoft were up 15.5% as investors reacted favorably to the company's earnings report.

See also: Why Microsoft's stock is soaring toward a historic gain after earnings

-Hannah Pedone