Enterprise artificial intelligence investment is entering a phase in which measurable financial returns are becoming more important than adoption levels alone
The firm said AI is increasingly being treated as a recurring operating expense, with chief financial officers comparing technology spending with labour costs and requiring clearer evidence of returns on investment.
This change is leading to greater discipline in AI budgets The firm said investors are also increasing their scrutiny of software companies to determine whether adoption of AI products can translate into sustainable growth and financial returns
System-of-Record Vendors Among Oppenheimer’s Preferred Exposure
Oppenheimer said system-of-record software providers and companies using seat-plus-consumption pricing models are positioned to participate in increased AI usage while retaining established customer relationships.
The firm said Microsoft (NASDAQ:MSFT), Oracle (NYSE:ORCL), Salesforce (NYSE:CRM) and ServiceNow (NYSE:NOW) have each established AI businesses exceeding $1 billion. Workday (NASDAQ:WDAY), meanwhile, is seeing high attachment rates for its AI offerings
Microsoft is among the firm’s preferred stocks, with Oppenheimer citing increasing platform demand, capital allocation and distribution across its installed customer base.
Oppenheimer also highlighted ServiceNow based on its growth and cash flow generation, medium-term financial targets and exposure to automation and security.
Braze (NASDAQ:BRZE) was included among the firm’s preferred names based on its role as a system of record for customer engagement and its profitable growth.
Figma and SoundHound AI Face Different Considerations
Oppenheimer expressed a more cautious view of Figma. While the firm said the company’s execution remains solid, it expects growth could moderate as the impact of pricing measures diminishes.
The firm also said Figma’s valuation means additional upside depends on the company continuing to outperform current expectations.
For SoundHound AI (NASDAQ:SOUN), Oppenheimer cited uncertainty around the timing of a profitability inflection as the company’s end markets become more mature and remain competitive.
The firm additionally highlighted SoundHound AI’s reliance on mergers and acquisitions to support guidance and its stock-based compensation levels.
