HSBC defends enterprise software with valuations at ‘historic lows’

HSBC believes enterprise software “will not be threatened by AI.” Rather, AI will be embedded within software platforms, the analyst tells investors in a research note titled “Software Will Eat AI.” The firm says enterprise software companies have been “doing the heavy lifting of designing, vibe-coding, and beta testing of embedded agents.” HSBC points out that software valuation levels are at “historic lows, even though the sector is poised to expand massively.” Software vendors are best suited for creating software with AI, the firm contends. Among the analyst’s Buy-rated software names are Oracle (ORCL), Autodesk (ADSK), Akamai (AKAM), Salesforce (CRM), CrowdStrike (CRWD), Alphabet (GOOGL) (GOOG), HP Inc. (HPQ), Intuit (INTU), Microsoft (MSFT), ServiceNow (NOW), Palantir (PLTR), TE Connectivity (TEL), and Zoom Communications (ZM).