Oppenheimer said enterprise artificial intelligence spending is moving from an experimentation phase towards a greater focus on return on investment, with businesses increasingly evaluating AI based on measurable financial and operational outcomes.
According to the firm’s research, AI is becoming a recurring operating expense for companies, with chief financial officers assessing investment in the technology alongside labour costs and seeking clearer evidence of returns.
Oppenheimer said spending is becoming more disciplined as companies assess where AI can generate measurable value. The firm also sees value creation moving further up the IT stack, while investors are paying closer attention to whether software providers can convert AI adoption into sustained revenue growth and returns.
Oppenheimer Highlights System-of-Record Software Vendors
Oppenheimer sees a favourable setup for system-of-record vendors and companies using seat-plus-consumption pricing models. According to the firm, these businesses combine established customer relationships with revenue exposure to increased AI usage.
Microsoft (NASDAQ:MSFT), Oracle (NYSE:ORCL), Salesforce (NYSE:CRM) and ServiceNow (NYSE:NOW) have each developed AI businesses generating more than $1 billion, according to Oppenheimer. The firm also said Workday (NASDAQ:WDAY) is recording high AI attach rates.
Among its preferred stocks, Oppenheimer highlighted Microsoft, citing accelerating demand for its platform, capital allocation and its distribution across an established customer base.
The firm also identified ServiceNow, pointing to its growth, cash flow generation, medium-term targets and exposure to automation and cybersecurity spending.
Braze (NASDAQ:BRZE) was another of Oppenheimer’s preferred names. The firm cited the company’s position as a system of record for customer engagement and its profitable growth profile.
Oppenheimer Flags Figma and SoundHound AI
Oppenheimer took a more cautious view of Figma, despite noting continued execution by the company. The firm said growth could moderate as the effects of previous pricing measures diminish, while its valuation means further share-price gains would depend on the company continuing to exceed expectations.
The firm also highlighted risks related to SoundHound AI (NASDAQ:SOUN). Oppenheimer cited uncertainty around the timing of profitability as the company’s end markets mature and remain competitive.
Oppenheimer also pointed to SoundHound AI’s use of acquisitions in supporting guidance and its level of stock-based compensation.