TLDR
- Wells Fargo surveyed 100 enterprise IT executives and found cloud spending growing 5% in 2026, outpacing overall IT budget growth of 2%
- Oracle named top infrastructure pick as cloud and AI infrastructure market expected to reach $1 trillion by 2030
- SAP chosen as top platform pick as established companies with mission-critical systems capture more AI spending
- Figma upgraded to top builder pick as software development emerges as strongest AI use case with consumption-based models
- ServiceTitan named top vertical software pick while Intuit downgraded to Equal Weight as sector shows uneven performance
Investment firm Wells Fargo released its 2026 software sector outlook based on a survey of 100 enterprise IT executives. The survey revealed cloud spending is growing at 5%, more than double the overall IT budget growth rate of 2%.
Demand is strongest in three areas: cloud infrastructure, cybersecurity, and generative AI. Cloud migrations showed the biggest improvement compared to previous surveys.
The analysts, led by Michael Turrin, identified Microsoft as gaining momentum with 40 survey respondents expecting increased spending. SAP and Oracle showed the largest improvement since Wells Fargo’s mid-year survey.
Oracle Leads Infrastructure Category
Wells Fargo selected Oracle as its top infrastructure pick for 2026. The firm expects the cloud and AI infrastructure market to reach $1 trillion by 2030.
Spending is expanding beyond AI research labs to hyperscalers, government agencies, and large enterprises. Wells Fargo favors companies that can secure financing, GPUs, and power capacity.
Wall Street analysts give Oracle an average price target of $308.90 per share. This represents upside potential of more than 62% from current levels.
SAP Chosen as Top Platform Play
SAP received the top platform pick designation from Wells Fargo. The firm believes established platforms with mission-critical data and systems are best positioned to capture AI spending.
As AI becomes a board-level priority, companies are consolidating vendors and moving AI tools from pilot programs into production. Trust and existing relationships are becoming more important in vendor selection.
The survey showed enterprises are moving core systems to the cloud, which benefits SAP. Customer spending is shifting toward platforms that can integrate AI across existing workflows.
Figma Upgraded for AI Development Tools
Wells Fargo upgraded Figma and named it the top pick among AI builders. Software development has emerged as the most practical AI use case.
The category is expanding into related areas like creative design. Wells Fargo sees strong potential for tools with usage-based or consumption-driven pricing models.
Companies building tools that enable AI development stand to benefit as adoption spreads. The consumption model allows revenue to scale with actual usage.
Vertical Software Shows Mixed Results
Wells Fargo named ServiceTitan as its top vertical software pick for 2026. The firm believes this year will favor selective stock picking in the sector.
Differences in valuations and growth outlooks are creating opportunities in vertical software. Performance across the category has been uneven.
Wells Fargo downgraded Intuit and Clearwater Analytics to Equal Weight. The downgrades reflect varied AI use cases and execution across vertical software companies.
