What are Barclays’ top picks for infrastructure software stocks amid AI shift?

Investing.com -- Barclays’ software team has identified leading infrastructure software companies positioned to benefit as artificial intelligence reshapes the enterprise technology landscape, with Oracle, DigitalOcean, Salesforce, and Snowflake ranking among the top picks in the large-cap segment.

The investment bank’s analysts believe AI will serve as an additive force rather than a wholesale replacement for existing enterprise software vendors. According to Barclays, these companies maintain strong competitive positions due to data gravity, embedded workflows, switching costs, and security and compliance standards. The firm suggests that focusing too heavily on single customer concentration risks overlooks the substantial opportunity available to AI infrastructure providers.

Here are Barclays’ top-ranked infrastructure software stocks:

1. Oracle (NASDAQ:ORCL) - The database giant leads Barclays’ rankings as the firm views the company as well-positioned to capitalize on AI infrastructure demand. Oracle’s entrenched position in enterprise data management provides significant advantages as organizations build out AI capabilities.

Oracle confirmed it is focused on delivering capacity for its partnership with OpenAI, a development that prompted Wedbush to reiterate its Outperform rating on the company. Oracle also launched new AI coding agent skills for its NetSuite platform to help developers.

1. DigitalOcean (NYSE:DOCN) - The cloud infrastructure provider ranks second on Barclays’ list. DigitalOcean’s platform serves as a foundation for developers and businesses implementing AI-driven applications, benefiting from the broader shift toward cloud-based infrastructure.

In recent developments, DigitalOcean launched its AI-Native Cloud platform, an integrated system designed for artificial intelligence workloads. Following the news, Oppenheimer raised its price target on the company, citing AI capacity, while Cantor Fitzgerald reiterated an Overweight rating.

1. Salesforce (NYSE:CRM) - The customer relationship management leader takes the third position in Barclays’ rankings. Salesforce’s embedded workflows and extensive customer base create switching costs that insulate the company as AI technologies integrate into existing enterprise systems.

Salesforce and Google Cloud announced an expanded partnership to enable AI agents to execute workflows across both platforms. Separately, Truist Securities reiterated a Buy rating on the stock following the company’s TDX developer conference.

1. Snowflake (NYSE:SNOW) - The cloud data platform company rounds out Barclays’ top four picks. Snowflake’s data warehousing and analytics capabilities position it to serve organizations requiring robust infrastructure to support AI initiatives.

Snowflake has seen analyst price targets adjusted, with UBS and Evercore ISI lowering their targets due to concerns over AI competition and valuation, respectively. The company also announced a change in its chief revenue officer.

Barclays emphasizes that enterprise vendors benefit from structural advantages that protect their market positions even as new technologies emerge. Data gravity keeps information anchored within existing platforms, while compliance and security requirements create additional barriers that favor established providers over new entrants.

The investment bank’s analysis suggests these infrastructure software companies are more insulated from disruption than investors may recognize, with their existing customer relationships and technical foundations providing pathways to participate in AI growth rather than face displacement from it.

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