DA Davidson notes that while the much anticipated GPT-5 release by OpenAI prompted a 3%-10% decline across a broad set of the firm’s software coverage, he believes that many software companies are well positioned for the AI revolution. The firm adds that while the debate around LLMs moving into the application layer will continue, it is easier to believe that the software that organizes code and data, and then observes and secures it, will be needed even more as AI ramps up. DA Davidson is positive on Microsoft (MSFT), Snowflake (SNOW), Datadog (DDOG), and Jfrog (FROG).
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