Raymond James shuffles rating on software stocks, names Salesforce top pick

Investing.com -- Raymond James downgraded Intapp Inc (NASDAQ:INTA ) and Vertex (NASDAQ:VRTX ) to "market perform" and RingCentral (NYSE:RNG ) to "outperform," with a price target of $45.

Workiva Inc (NYSE:WK )was upgraded to "outperform," with a price target of $135 on strong growth potential.

Salesforce (NYSE:CRM ) emerged as the top large-cap pick for 2025, backed by robust multi-cloud demand, profitability improvements, and its AI strategy. Mid-cap Waystar and small-cap Weave Communications were also named as top picks for their strong growth profiles and execution.

“While the overall demand environment appears stable with some potential greenshoots on demand, we think vertical names could be a source of funds for other software investments, while many still possess growth stories that warrant these premium valuation,” analyst wrote.

Raymond (NS:RYMD ) James noted software stocks matched broader market gains in 2024, with the sector’s late-year recovery fuelled by AI narratives. Vertical software providers outperformed horizontal peers, benefiting from sticky customer relationships and strategic demand.

M&A activity outpaced IPOs in 2024, but optimism remains for an improved IPO landscape in 2025.

“While we saw a few new software IPOs in 2024, the supply of new software companies continues to lag takeouts, particularly from PE”

The brokerage highlighted the potential for valuation gains across the sector as companies execute growth initiatives.

 

Source: Investing.com