Software companies have roared back into fashion with a string of strong earnings. It's time to get excited, but only selectively, according to Morgan Stanley analysts.

Back the stocks with momentum from earnings is the advice from the investment bank. That means enterprise-software companies ServiceNow and Atlassian, both of which pleased the market with their recent reports.

"We remain positive on ServiceNow and Atlassian, supported by durable moats, improving growth setups, and rising agent usage providing incremental monetization levers," wrote Morgan Stanley's Adam Wood and colleagues in a research note.

Importantly, both ServiceNow and Atlassian look to be getting to the point where customer purchases of AI capacity should outweigh concerns about what happens to per-user prices as agents take over more work. In any case, the number of seats-or users-for both companies still appears to be growing.

But beware of bargain hunting. The Morgan Stanley team took broadly negative views on Workday and Intuit. For Workday, the issue is relatively slow adoption of AI in areas such as HR and finance, which means monetization is further away. Meanwhile, tax software company Intuit still needs to show it can attract new customers to offset competition for its Turbo Tax product.

And what about sector heavyweight Salesforce? Well it's a mixed picture despite a positive reaction when the customer-relationship management software company beat expectations for its earnings report last month. Wood and company note that the company's organic subscription revenue growth slowed to 7% from 8% despite a surge in revenue from its Agentforce AI product.

"Easier comps should provide relief into the second half but we continue to look for evidence of durable organic acceleration," wrote Wood.

All of ServiceNow, Atlassian, Workday, Intuit and Salesforce were dropping in early trading Friday as a strong jobs report raised expectations for the Federal Reserve to hike interest rates later this month.