Key Takeaways
- BofA analyst Koji Ikeda highlights five software infrastructure stocks as prime investment opportunities for the latter half of 2026
- The selected stocks have collectively surged 30% year-to-date, outperforming the software sector ETF by 42 percentage points
- Each company exceeded quarterly earnings forecasts, generating an average post-earnings rally of 36%
- Artificial intelligence integration serves as the primary catalyst fueling expansion across all five firms
- Cautious forward guidance from management teams positions these stocks favorably for continued earnings surprises
Bank of America’s Koji Ikeda has spotlighted a select group of software infrastructure companies poised for sustained momentum through the remainder of 2026. This elite collection, referred to as the “Fab Five,” has dramatically outperformed its peer group year-to-date.
The iShares Expanded Tech-Software Sector ETF has declined 12% during 2026, yet this quintet has delivered average gains of 30%. Ikeda reaffirmed Buy recommendations across the entire group.
According to the investment bank, exceptional quarterly results, measured forward projections, and accelerating artificial intelligence integration position these equities advantageously for the coming months.
Breaking Down BofA’s Top Software Stock Selections
Snowflake
Snowflake stock experienced a remarkable single-session rally exceeding 35% following its most recent quarterly disclosure. Product revenue expanded 34% compared to the year-ago period, marking an acceleration from the previous quarter’s 30% pace.
Bank of America emphasizes that the firm’s artificial intelligence offerings, particularly Cortex AI and Cortex Code, are achieving significant penetration within corporate technology environments. Should AI implementation accelerate beyond current expectations, additional upside potential exists.
Datadog
Datadog delivered the most impressive performance among the group, skyrocketing nearly 70% post-earnings. Revenue growth accelerated to 32% year-over-year, while AI-focused revenue streams now represent over 10% of total sales and are expanding at triple-digit annual rates.
BofA analysts view the observability segment as exceptionally promising within the software landscape, with Datadog positioned to capitalize on sustained long-term demand.
JFrog
JFrog shares jumped 43% immediately following quarterly results. Cloud-based revenue growth reached 50%, accelerating from the previous quarter’s 42% rate.
The company functions as a comprehensive risk mitigation solution within software development, spanning the entire supply chain from binary asset management through security protocols. BofA suggests that either a significant enterprise contract or a major supply chain security incident could serve as a share price catalyst.
Twilio
Twilio equity climbed nearly 50% after delivering above-consensus performance. Gross profit dollar growth improved markedly to 16% from the prior quarter’s 10%.
Bank of America positions Twilio as critical infrastructure supporting both traditional business communications and emerging AI agent interactions across voice and messaging platforms. Fresh voice AI partnerships and margin expansion represent the primary upside scenarios under the bank’s coverage.
MongoDB
MongoDB recorded the most modest post-earnings appreciation, advancing 4.5%. Atlas revenue growth ticked higher to 29.4%.
BofA anticipates the most significant AI-related tailwind for MongoDB remains on the horizon, connected to enterprise deployment of consumer-facing AI applications. The firm suggests this catalyst may materialize earlier than consensus expectations reflect.
Key Catalysts for the Second Half
Bank of America notes that all five executive teams provided measured outlooks despite delivering strong quarterly performance, creating opportunity for positive guidance revisions in subsequent quarters.
Analysts expect market participants will closely track whether AI-related demand maintains its trajectory and whether enterprise customers continue adopting next-generation AI capabilities at rates sufficient to sustain the group’s expansion.
Currently, BofA regards these five software infrastructure names as optimally positioned heading into the year’s second half.
