Technology One (ASX:TNE) is expected to reach the top end of its fiscal 2026 guidance supported by strong momentum in the second half, a robust contract pipeline and benefits from the AI boom, Jefferies said in a note on Tuesday.

The enterprise software company is seeing a pipeline that is 10 times larger following its product showcase events, and Jefferies projects this to translate into revenue in fiscal 2027 and 2028.

Meanwhile, AI disruption risk is low and instead acts as a tailwind for the company, as its ERP systems are deeply embedded in customers' operations. The company's fast software implementation timeframe enables customers to adopt and benefit from AI features even more, the firm added.

The investment firm also views the company deserves to trade at a premium valuation compared to its tech peers, due to its higher revenue growth and profitability, as reflected in its Rule of 40 performance.

Jefferies maintained a buy rating and raised its price target by 22% to AU$34.